The probability of a March cut is now hovering just over 50%.
Investors fear rates on cash-like investments could soon plunge.
The bond market's bold bet on U.S. interest-rate cuts is set for its biggest test yet.
Rates across the maturity spectrum were higher by at least eight basis points on the day.
The markets continued to bet on rate cuts despite the Fed chairman's assertions that the outlook on rates is still uncertain.
Cooling jobs data and soft consumer inflation figures proved a boon for bonds in November.
Most Wall Street strategists are predicting that the trend of lower yields will persist.
Regulators have been examining how to strengthen the market over the past three years.
The term premium is seen as protection against unforeseen risks such as inflation and supply-demand shocks.
Long-term Treasury yields have slid since October on speculation that the Fed has completed its aggressive tightening cycle.