Investors weigh economic outlook for 2025, causing treasury yields to fall.

On Friday, U.S. Treasury yields decreased due to investors' evaluation of the economic prospects for the upcoming year, during a relatively tranquil trading week.

The 10-year Treasury yield decreased by more than 2 basis points to 4.547%, while the 2-year Treasury yield decreased by 1 basis point to 4.237% shortly after 7 a.m. ET.

Prices and yields move in opposite directions, with one basis point equivalent to 0.01%.

Due to a holiday-shortened trading week, investors are assessing the economic outlook for the upcoming year with limited data available on the economic front. Bond markets closed early on Tuesday and remained closed on Wednesday for New Year's Day.

The manufacturing sector's growth will be revealed in the ISM manufacturing PMI report for December, which will be published on Friday. A PMI reading above 50% indicates growth, while a reading below 50% means contraction.

Initial jobless claims data for the week ending Dec. 28 came in at 211,000, below economists' expectations of 225,000, per Dow Jones. This was down from a reading of 220,000 the previous week.

In 2024, the 10-year Treasury yield fluctuated, starting below 3.9%, rising to 4.7% in the spring, dropping below 3.7%, and finishing the year at 4.5%.

In December, the Federal Reserve decreased interest rates by 0.25% and hinted at a reduction in the number of rate cuts in 2025.

Policymakers will meet again in January to make decisions on monetary policy, and investors are anticipating a pause in the next meeting, according to the CME FedWatch tool. Additionally, the Fed has indicated that investors can expect a total of two rate cuts in 2025.