The Goldman Sachs Standard & Poor’s Commodity Index has declined 8.4 percent since the end of August.

The cost of insuring against inflation during the next five years is still relatively expensive. At 2.18 percentage points, the break-even rate on five-year TIPS compares with 2.47 percentage points on 30-year TIPS.

The spread, which is below the median of 0.62 the past five years, shrank to about 0.15 percentage point in March. The last time the gap was that narrow was in July 2008, when oil reached a record $147.27 a barrel and the consumer price index was rising at a 5.6 percent clip. Oil closed at $91.29 last week. It was $89.81 today.

Led by the Fed’s more than $2.5 trillion since 2008, central banks around the world have injected about $5.3 trillion into the economies to sustain growth. All that extra cash is bound to eventually spark inflation, according to Bill Gross, manager of Pacific Investment Management Co.’s $289 billion Total Return Bond Fund, the world’s largest.

Relative Returns

“We’re not inflationary hawks in 2013,” Gross said in a Feb. 22 interview with Bloomberg. “We simply think because central banks are writing trillions of dollars worth of checks, ultimately that will produce the desired inflation they are targeting.”

Returns on TIPS have topped non-indexed Treasuries since 2009, gaining an average of 9.4 percent in each of the past four years, versus 3.41 percent for nominal U.S. government debt, according to Bank of America Merrill Lynch indexes. This year, nominals are beating TIPS, 1.93 percent versus 1.27 percent.

“Buy insurance when it’s cheap,” Mitchell Stapley, the Grand Rapids, Michigan-based chief fixed-income officer for Fifth Third Asset Management, which oversees $15 billion in assets, said in an April 10 telephone interview. “It’s not like you’ve suffered long periods of underperformance” by owning inflation-indexed U.S. debt versus nominal Treasuries.

Fund Outflows

Investors have withdrawn $2.8 billion in the first three months of 2013 from mutual funds that the buy TIPS, the longest period of withdrawals since the fourth quarter of 2008, according to Chicago-based fund tracker Morningstar.