Treasury benchmark yields are on course to set a new all-time low in March if they keep rallying at the current pace.

Ten-year yields dropped almost 40 basis points during the past three weeks to 1.66 percent. The record low of 1.379 percent was set in July 2012. Plunging stock prices are driving demand for the relative safety of government debt, while traders abandon bets for the Federal Reserve to raise interest rates. Yields near zero in Japan and Germany are boosting the allure of U.S. Treasuries.

“We’ll see a record low around 1 percent” for the benchmark, said Toshifumi Sugimoto, chief investment officer at Capital Asset Management in Tokyo. “We’ll see more money going into U.S. Treasuries.” Sugimoto, who has 30 years of experience in fixed income, said he’s buying long-term securities and predicts the rally will last through April.

The 10-year Treasury yield was little changed Friday as of 10:20 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in February 2026 was 99 22/32.

The Bloomberg U.S. Treasury Bond Index has returned 3.6 percent this year, while the MSCI All Country World Index of shares has slumped 12 percent.

The odds the Fed will follow its December rate increase with another in 2016 have dropped to 11 percent, from a probability of 93 percent at the start of the year, futures contracts indicate.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE