Treasuries fell on Thursday after two U.S. government reports showed stronger than expected retail sales and inflation in wholesale prices, reducing the chance that the Federal Reserve will need to cut interest rates to give a boost to the economy.

Retail sales were up more than expected in November, with the U.S. Commerce Department reporting an increase in sales of 1.2 percent, nearly double estimates.

The Producer Price Index rose 3.2 percent in November, the highest in 34 years. Excluding volatile food and energy prices, the index rose a higher than expected 0.4 percent. Bond yields move inversely to prices.

Ten-year notes rose fell 24/32 in price to yield 4.18 percent from 4.09 late Wednesday. Two-year notes were down 4/32 in price to yield 3.21 percent compared to 3.14 late Wednesday.

Retail sales Inflation