U.S. Treasury prices recouped earlier losses on Friday as stronger-than-expected economic data led to profit taking.
A report showed Friday that the pace of business activity in the U.S. Midwest rose slightly in February, beating expectations and snapping a three-month run of slower growth.
Separately, data showed inflation in the euro zone unexpectedly held steady this month, cooling expectations the European Central Bank might ease monetary policy as early as next week and further pressuring Treasuries.
Still, losses in the Treasurys market were capped by a big revision lower of the U.S. government's estimate for fourth-quarter growth, due to weak consumer spending and exports.
"This is profit taking because rates are so low that any news that works against bonds tends to bring an exaggerated reaction," said Jim Vogel, an interest rate strategist at FTN Financial in Memphis.
"We are very near the barrier of how low rates can go unless the economy really begins to suffer," said Vogel.
Traders predict yields will remain bound to the 2.65 percent to 2.76 percent range as investors wait for the payrolls report for February.