NEW YORK (TheStreet) -- The Federal Reserve's latest statements sent bond yields lower, as a rate hike in the near-term seems less likely. 10-year Treasury yields ultimately dipped below 2% on the news and currently trade at 1.925%. 

According to Heather Loomis, West director of fixed income at J.P. Morgan Private Bank, there's a better chance of 10-year yields climbing closer 3% than falling to 1%. 

She reasoned that the economic conditions in the U.S. are simply too good to justify a drop to 1%. In fact, if it weren't for the bond buying programs in Europe and Japan, Treasury yields would likely be higher. 

Because the European Central Bank and Bank of Japan are buying so many bonds under their quantitative easing programs, it's driving bond prices higher and therefore yields are dropping. With historically low yields in other countries, it makes the Treasury bond yield of 2% pretty attractive to investors, which keeps demand for U.S. debt steady, Loomis said. 


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As a result, European bonds are priced unattractively. There is either too much risk, such as with Greek debt, or the yields are simply too low and in some cases, are actually negative, she said. 

As for emerging markets, these assets will likely suffer due to the rise in the U.S. dollar and are therefore unattractive as well. 

So where is there value? According to Loomis, investors should take a closer look at preferred stock. It's one of the few places in fixed-income where yields aren't near all-time lows, she said. 

Yields of 5% to 6% are still achievable, and most of preferred stock issuers are financial institutions and banks, which have improved their credit ratings over the past few years. 

Some of these options also provide investors with tax-sheltered income as well, she concluded.