On a holiday-shortened trading day, the 10-year Treasury yield reached its lowest point since October.

U.S. markets retreated to a new low in late October, going back to Friday, as they prepare for a shortened trading day following the Thanksgiving holiday.

The 10-year Treasury yield decreased by approximately 2 basis points to 4.219%, reaching its lowest point since Oct. 30. Additionally, the 2-year Treasury yield dropped by 1 basis point, currently sitting at 4.202%.

Yields and prices move in opposite directions, with one basis point equal to 0.01%.

The U.S. data front is calm on Friday, after a week of intense activity.

The Federal Reserve's preferred inflation measure slightly exceeded the previous month's reading at 2.3%, in line with the Dow Jones consensus forecast. Initial claims for unemployment benefits decreased more than expected, indicating labor market tightness.

The Fed's November meeting minutes indicated that if price increases and labor data remained roughly as anticipated, it would be appropriate to "gradually" decrease interest rates.

According to economists, President-elect Donald Trump's threat of passing tariff hikes on China, Mexico, and Canada is expected to increase domestic inflation, potentially causing the Fed to ease policy more cautiously than it would have otherwise.

The FedWatch Tool from CME Group indicates that markets are currently pricing in a 66.3% chance of a 25 basis-point rate cut in December, compared to a 33.7% chance of a hold.