JPMorgan Says Treasury 10-Year Yield May Slide to 1.5% on Europe

JPMorgan Chase & Co., one of 21 primary dealers that trade with the Federal Reserve, said the U.S. 10-year note yield may drop to a record low 1.5 percent as deteriorating conditions in Europe boost demand for safe assets.

“Treasuries have room to rally further if the situation in Europe continues to deteriorate,” strategists led by Terry Belton, global head of fixed-income strategy for the firm in New York, wrote in a client note dated May 11. Political turmoil in Greece since voters revolted against austerity in May 6 elections raises “the risks of a Greek exit from the euro zone following the new elections likely to take place June 17,” they wrote.