U.S. bonds were higher on Friday as investors questioned whether a string of weaker-than-expected economic data is due to severe weather impacting activity in the short term or a symptom of a more structural economic slowdown.
Friday's tepid housing sales data kept investors sidelined, analysts said. The market shrugged off a larger-than-expected drop in U.S. existing homes sales, which declined by 5.1 percent in January, the National Association of Realtors reported on Friday.
Buyers stepped into the market as the trading session wore on. One fund manager attributed the moves up in price to anticipation that it is not just severe weather behind the weak data.
"The market is ending the week hedging itself in case all this weakness is not 100 percent weather related,'' said Wilmer Stith, co-manager of the Wilmington Broad Market Bond Fund in Baltimore.
(Read more: The big chill: Jan. home sales plunge with weather)
One strategist pointed toward a potential momentum play that would see buyers coming into the market if the 10-year yield closes in on the 3 percent mark.
"We saw good buying in January and I would imagine those bids would return if we get near those levels in the coming days," said Bill O'Donnell, an interest rate strategist at RBS Securities in Stamford.
Analysts said they expect next week's consumer confidence figures, due on Tuesday, to have a more significant impact on the market.
Incoming data is already expected to be weaker given the severe winter conditions that prevailed through most of the month. The latest consensus estimate of economists polled by Reuters indicates February consumer confidence will decline slightly to 80.4 from 80.7.
The Fed, as part of its quantitative easing program, bought $1.25 billion debt maturing between 2036 and 2043 on Friday. The purchases appeared to have little impact on current prices.