You should have directed that question to Timber. Nevertheless here is my answer based only on what I think is happening and not on what I know is ACTUALLY happening.
Central banks target inflation. In the case of the Fed that has been 2%. So, if you believe that that target is going to hold then 2.5% would become .5%. At the same time Europe is facing deflation and if you believe that they are going to loose a decade a la Japan then less than 1% for German bonds may be not so bad as it sounds. And it certainly would be even better after having taking into consideration currency conversion, transaction costs, etc.
