The benchmark 10-year Treasury yield was on track to post its biggest monthly drop since August as the deadly coronavirus fanned recession fears.
The yield on the benchmark 10-year Treasury note, which moves inversely to price, fell slightly to 1.548% Friday. The yield has tumbled nearly 40 basis points in January, on pace for its biggest monthly decline in five months.
The 10-year yield also dipped below the three-month Treasury rate of 1.552%, inverting a key part of the yield curve.
The so-called yield curve inversion has been a strong sign since 1950 that a recession is coming in the next 12 months. This part of the yield curve is also closely watched by the Federal Reserve for signs of an economic downturn.
Markets have been spooked by the outbreak, with investors trying to assess the potential economic fallout.China's National Health Commission confirmed on Friday that there have been 9,692 confirmed cases of the coronavirus, with 213 deaths.
The World Health Organization (WHO) recognized the deadly pneumonia-like virus as a global health emergency on Thursday, citing concern that the outbreak continues to spread to other countries with weaker health systems.
On the data front, personal income for December disappointed on the margin with a 0.2% month-over-month increase, versus a 0.3% growth anticipated. On the other hand, personal spending matched estimates at 0.3% last month.
Chicago Purchasing Managers Index (PMI) for January and a final reading of consumer sentiment for January will follow slightly later in the session.
—CNBC's Sam Meredith and Matt Clinch contributed to this article.