ByStephen Percoco: The beginning of the return to normalized interest rates took a big toll on straight Treasury securities in the 2013 second quarter, but TIPS got hit even harder. For the quarter, the average TIPS security lost 6.6%, worse than the average loss of 3.0% on comparable maturity Treasuries and by far the worst losses seen in the TIPS market since the 2008 financial crisis. TIPS are complicated primarily because their returns are based upon two components: current income and inflation.