. Treasury real yields fell sharply on Tuesday as traders hedging against the possibility of rising prices scooped up inflation-linked securities, even as they also bought conventional debt as a low-risk investment. The yield on 10-year Treasury Inflation Protected Securities dipped as low as -1.21%, the lowest since early August, and the yield on 30-year TIPS touched a record low of -0.592%. The growing demand for TIPS indicated concerns about inflation taking hold among a broader swath of investors and the public, analysts said. "The headline inflation numbers we"re getting monthly, it"s no longer a phenomenon for investment professionals, now it"s hitting the mainstream," said Kevin Flanagan, head of fixed income strategy for WisdomTree. At the same time, the continued buying of conventional debt showed investors trying to parse out the next moves of the U.S. Federal Reserve, said Flanagan and others, and suggested at least some investors have confidence the Fed can limit price hikes. The benchmark 10-year yield was down 6.3 basis points at 1.4341% in afternoon trading. The yield on the 30-year bond reached as low as 1.795%, the lowest since July, and was last down 6.6 basis points at 1.8218%. The Fed this month will begin to remove the first pillar of extraordinary stimulus it introduced in March 2020 to shield the economy from the COVID-19 pandemic, as it starts to taper its massive bond purchases. There is growing debate over how much longer high inflation can be tolerated. Some of the decline in yields on Tuesday came in the morning after the U.S. Labor Department said producer prices increased solidly in October. Traditionally that might push up yields, according to Stan Shipley, managing director for Evercore ISI, but he said the continued buying showed investors remain interested in safe U.S. securities. "People are sitting here unwilling to take risks," he said. Demand for an auction of $39 billion in 10-year Treasury notes was "on the weak side", according to a note to investors from DRW Holdings strategist Lou Brien. An auction of $25 billion in 30-year bonds will follow on Wednesday, which is also the scheduled release date for consumer price index data that will be closely watched as a gauge of inflation. Priya Misra, global head of rates strategy for TD Securities, said another factor influencing Tuesday"s trading included a sense that non-U.S. central banks are feeling less hawkish pressure, leading to buying overseas. Germany"s 10-year inflation-linked bond, which reflects so-called real yields, fell to a record low of -2.09%. Misra also noted a recent report that U.S. President Joe Biden met with Fed Governor Lael Brainard as a potential next Fed Chair. She would be considered a dovish pick. The bond buying pushed down a closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations. It was about two basis points lower at 102 basis points, its lowest since Oct. 28. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 3.8 basis points at 0.4108%. November 9 Tuesday 2:58PM New York / 1958 GMT Price Current Net Yield % Change (bps) Three-month bills 0.045 0.0456 0.000 Six-month bills 0.06 0.0609 -0.005 Two-year note 99-238/256 0.4108 -0.038 Three-year note 100-24/256 0.7183 -0.041 Five-year note 100-68/256 1.07 -0.050 Seven-year note 100-104/256 1.3138 -0.063 10-year note 98-84/256 1.4341 -0.063 20-year bond 98-84/256 1.8513 -0.057 30-year bond 104-20/256 1.8218 -0.066 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 20.50 1.25 spread U.S. 3-year dollar swap 16.50 -3.00 spread U.S. 5-year dollar swap 8.50 -0.25 spread U.S. 10-year dollar swap 2.75 0.25 spread U.S. 30-year dollar swap -20.75 0.25 spread (Reporting by Ross Kerber in Boston; Editing by Mark Heinrich, Andrea Ricci and Dan Grebler)