VIPSX is basically a long-term bond fund (avg maturity around 10 years). It's going to be sensitive to interest rate changes, but in recent years it looks less volatile than other long-term bond funds.
Here's a chart comparing VIPSX with VBLTX (LT index) over the last year:
You're about to see something new wrt TIPS: negative real yields. Everybody knows that short-term treasuries currently have a negative real yield, but you don't see it because they're quoted in terms of nominal yield.
Watch the YTM of the 1/07 TIPS as it matures. It's almost zero now, and will soon be quoted as a negative yield