After falling sharply early in the session, treasuries regained some ground over the course of the trading day on Friday but still close modestly lower.
Bond prices finished the day in negative territory but well off their worst levels. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 2.552 percent after reaching an intraday high of 2.594 percent.
The early weakness among treasuries came following the release of a report from the Commerce Department showing retail sales rose in line with economist estimates in the month of December.
The Commerce Department said retail sales increased by 0.4 percent in December after climbing by an upwardly revised 0.9 percent in November.
Economists had expected retail sales to rise by 0.4 percent compared to the 0.8 percent increase originally reported for the previous month.
Excluding auto sales, retail sales still rose by 0.4 percent in December after jumping by 1.3 percent in November. The increase in ex-auto sales also matched estimates.
A separate report from the Labor Department showed consumer prices rose by less than expected in December, reflecting a sharp pullback in energy prices.
The Labor Department said its consumer price index inched up by 0.1 percent in December after climbing by 0.4 in November. Economists had expected prices to rise by 0.2 percent.
Meanwhile, the report said core consumer prices, which exclude food and energy prices, increased by 0.3 percent in December after ticking up by 0.1 percent in November. Core prices had been expected to rise by 0.2 percent.
The Labor Department said the annual rate of consumer price growth slowed to 2.1 percent in December from 2.2 percent November, although the annual rate of core price growth accelerated to 1.8 percent from 1.7 percent.
Paul Ashworth, Chief U.S. Economist at Capital Economics, predicted base effects will keep core inflation low in the first few months of 2018.
"Once spring comes around, however, the big declines in components like wireless telephone services prices will drop out of the annual calculation and the core inflation rate will rebound well above 2%," he added.
Following the long, holiday weekend, reports on industrial production, housing starts, consumer sentiment, and regional manufacturing are likely to attract attention next week.
The Federal Reserve is also due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.