The yield on the 10-year Treasury briefly fell below 0.7% as part of a continuing fear trade sparked by uncertainty over the coronavirus.

Friday's stock market rout and a fresh record low in government bond yields pushed traders to assign a 65% chance of a 75 basis point cut by the March 17-18 Federal Open Market Committee meeting, according to the CME's FedWatch tracker. There was zero probability assigned to that steep of a cut Thursday.

Traders now expect the Federal Reserve to cut its benchmark interest rates by three-quarters of a percentage point this month, even after the reduction earlier this week.

If the market is correct, the cut in the federal funds rate would take the borrowing cost in short-term markets down to a range of 0.25%-0.5%. On Tuesday, the Fed announced a 50 basis point cut that put the current target to 1%-1.25%.

"We knew the Fed at some point if we had a recession again would get the funds rate to zero, and that is effectively being priced in," said Mike Collins, senior portfolio manager at PGIM Fixed Income. "There's a very good chance they cut a couple times more, maybe get to 50, maybe get to zero at the end of this year and probably get stuck there."

That view got some support Friday, when various Fed regional presidents, including New York's John Williams, Boston's Eric Rosengren and St. Louis' James Bullard all said the market is not wrong to expect more central bank help if the coronavirus situation worsens.

In afternoon trading Friday, the market was pricing in a 0.53% funds rate, but that was drifting lower through the day.

The possibility of the Fed going to zero, where it went in December 2008 and stayed for seven years, rose through the day Friday. Traders put a 35% chance of that happening by December, while also assigning a 12% probability to the central bank reversing some of its cuts and going back to a target range of 0.5%-0.75%.