The 10-year Treasury yield rose 2.4 basis points to 5.133%, from Thursday’s settlement of 5.102%, according to Tradeweb. The two-year yield edged down to 4.850% from 4.862%. Germany’s 10-year Bund yield gained 0.039 percentage point to 3.398%, and yields on other 10-year eurozone bonds also rose.

The U.S. Producer Price Index increased 0.3% in October, slowing from a 1.4% rise in September and below the 0.4% gain economists surveyed by The Wall Street Journal had forecast. But recent inflation figures and hawkish comments from policymakers have kept expectations of further Fed tightening firm.

Money markets put the probability of a 25-basis-point increase in December at 91%, and the chance of a 50-basis-point move at 9%, according to LSEG data. SEB expects a 25-basis-point increase in December and another of the same size in March, chief U.S. and eurozone rates strategist Jussi Hiljanen said. He said stronger-than-expected U.S. growth suggests current policy is not restrictive enough. Although Fed Governor Christopher Waller has raised the possibility of a 50-basis-point move, Hiljanen said the majority may favor smaller, gradual increases at every second meeting.

Cleveland Fed President Beth Hammack said Thursday she prefers smaller, steadier policy changes, which make it easier for businesses and households to plan. San Francisco Fed President Mary Daly said at an event in Palo Alto, Calif., that further tightening would likely be needed because inflationary pressure remained consistent beyond sectors most directly affected by tariffs or oil.

Jefferies also expects a 25-basis-point December increase. Beyond that, the outlook will depend on the war and oil prices, global economist Mohit Kumar said in a note. If the current “no war no peace” situation lasts for the next couple of months, he said, a Fed increase in January could become more likely. S&P Global Ratings was expected later Friday to review Italy’s BBB+ credit rating, which has a positive outlook.