Still trying to understand TIPS and in particular VTIP

TIPS have a real interest rate and the principal is adjusted based on the cpi-u (and the principal can never be less that the original upon redemption). Sounds good, makes sense.

These are the current auction results from TreasuryDirect:

5 Yr TIPS as of 12/30/22 1.625%
5 Yr Note as of 1/31/23 3.5%

3.5 - 1.625 = 1.875 inflation will provide an identical return.
if inflation > 1.875 then that TIPS is better else that Note.

I sure expect inflation to be > 1.875% (maybe not, but seems a good guess). So aren't 5 Yr TIPS a better investment now than a 5 Yr Note?

And, if so, why is VTIP going down so much? I realize it's based on earlier TIPS purchases that had negative interest rates, but still... it's a short 2 1/2 year or so duration fund and inflation is running very high. Or maybe the better question is: how much lower can VTIP realistically go? It's near its record low?

Okay, one more question: with an interest rate of 1.625% along w/ cpi-u adjustments to principal, aren't TIPS now better, as far as the return, than I-Bonds? I-Bonds only follow the cpi.