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US gross domestic product grew at a 0.7 percent annual rate, the Commerce Department said, the weakest performance since the first quarter of 2014.
But there were positive elements. For instance, the core inflation measure, the PCE index, was 2.0 percent, compared with 1.3 percent in the fourth quarter, suggesting the Fed remains on track to raise interest rates this year.
Also, first-quarter employment costs rose to 0.8 percent, higher than market expectations, an indication of accelerating wage growth.
In morning trading, benchmark 10-year notes were down 9/32 in price to yield 2.328 percent. Yields hit session highs of 2.338 percent.