By Sam Goldfarb

U.S. government bond yields drifted lower Friday, as the bond market continued its quiet march to the end of the year.

In recent trading, the yield on the benchmark 10-year Treasury note was 2.530%, according to Tradeweb, compared with 2.550% Thursday. Yields fall when bond prices rise.

After more than a month of intense selling, the bond market has settled down over the past few days, showing few signs of breaking out of a tight trading range.

Bond prices were supported Friday by a drumbeat of news reports on terrorist activity, giving traders with a reason to seek out the safety of haven debt ahead of the long weekend, said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.

The bond market will close at 2 p.m. EST Friday and will remain shut Monday to observe the Christmas holiday.

Treasury prices edged lower Thursday after the U.S. economy was reported to have grown at a faster pace than previously reported. Other data, however, showed little momentum behind higher inflation, providing a note of caution to investors who have been selling bonds partly out of fear that consumer prices could surge next year.

Defying the expectations of many analysts, Treasury yields have soared since the November election, as investor bet that President-elect Donald Trump and a Republican-controlled Congress will increase the budget deficit by cutting taxes and boosting spending on defense and infrastructure.

A more expansive fiscal policy could diminish the value of outstanding government debt by adding to the supply of bonds. It could also spur growth and inflation, which would erode the fixed returns of bonds and possibly lead the Federal Reserve to quicken its pace of interest-rate increases.

The postelection bond selloff briefly gained new momentum last week when the Fed raises rated for the second time since 2006 and signaled that it expects to lift rates three times next year, up from its previous estimate of two times.

Investors, though, now seem content to wait until the new year to place their next major bets on the market. Some say it is difficult to know where Treasurys should trade until there is more clarity about federal budget policy.

"It will be interesting year in 2017, but the rest of 2016 seems to be a bit of a yawn," Mr. Lyngen said.

Write to Sam Goldfarb at sam.goldfarb@wsj.com

(END) Dow Jones Newswires

December 23, 2016 10:50 ET (15:50 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.