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US bond yields rise slightly on Yellen remarks

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US 3-MO
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US 1-YR
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US 10-YR
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U.S. sovereign yields rose slightly on Friday after Fed Chair Janet Yellen said a rate increase "may be warranted" this year.

Yields on benchmark 10-year Treasury—used to calculate mortgage rates and other consumer loans—closed at 1.9625 percent after falling to session-lows of 1.9499. Thirty-year bond yields also ticked up after Yellen's statement to 2.5360 from 2.5303.

Yellen delivered her remarks at a San Francisco Fed conference and said that seeing a rise in core inflation was not essential to hiking rates. Nevertheless, she also suggested that lower inflation and weaker wages would hold the central bank from executing its first rates increase in nine years.

U.S. bond yields traded lower throughout most of Friday's session ahead of Yellen's statement, as U.S. economic growth cooled in the fourth quarter as previously estimated, with businesses throttling back on inventory and equipment investment but robust consumer spending limiting the slowdown in the pace of activity.

Gross domestic product expanded at a 2.2 percent annual rate, unrevised from last month's forecast, the Commerce Department said on Friday in its third estimate. The economy grew at a 5 percent rate in the third quarter.

The government also reported that after-tax corporate profits fell at a 1.6 percent rate in the fourth quarter, as a strong dollar dented the earnings of multinational corporations.

Read More US GDP unrevised at 2.2 pct in Q4; corporate profits fall

Earlier in the day, Fed Vice Chair Stanley Fischer spoke in Frankfurt on regulatory issues.

On Friday, the University of Michigan's final consumer sentiment report was released for March. The index was down from the previous month, but beat analysts' expectations.

Read More US consumer sentiment at 93.0 in March vs. 92.0 estimate

Yields dropped the day after they rose amid a weak seven-year note auction. Demand during the auction was weak as the bid-to-cover ratio, an indicator of demand, was 2.32, down from a recent average of 2.50.

—CNBC's Ben Berkowitz and Reuters contributed to this report.