TREASURIES-Prices gain; investors cautious on debt ceiling
* Prices rise on caution ahead of long weekend
* Investors stay wary of T-bills at risk of delayed payments
* Fed to buy $1.25 bln - $1.75 bln bonds due 2036-2043
NEW YORK, Oct 11 (Reuters) - U.S. Treasuries prices rose on Friday as investors remained cautious that Washington will reach a deal to raise the federal debt ceiling and avert a potential default, with volumes light heading into the long U.S. holiday weekend. No deal emerged from the 90-minute meeting between President Barack Obama and Republican leaders on Thursday, but talks continued into the night in an effort to re-open the government and extend the government's borrowing authority beyond an Oct. 17 deadline. One senior Republican said an agreement could come on Friday, though hurdles remain. Short-dated Treasuries bill yields remained elevated on Friday, though some were off their highest levels earlier in the week, as banks and investors shy away from holding debt that is at any risk of delayed interest or principal payments. "We need the weekend with a minimum of drama before people are comfortable that (a default) is off the table," said Jim Vogel, interest rate strategist at FTN Financial in Memphis, Tennessee. Higher hopes that a deal to raise the debt ceiling will be reached on Thursday sent longer-dated yields spiraling higher, breaking through technical support levels, and some of the most stressed Treasuries bills also eased from their highs. Some of that reversed on Friday as investors squared positions before the long U.S. Columbus Day weekend. Bond markets are closed on Monday. Benchmark 10-year notes were last up 7/32 in price to yield 2.66 percent, down from 2.69 percent late on Thursday. Thirty-year bonds rose 17/32 in price to yield 3.70 percent, down from 3.74 percent. The Fed will buy between $1.25 billion and $1.75 billion in bonds due 2036 to 2043 on Friday as part of its ongoing purchase program. Yields on one-month Treasuries bills that come due on November 7 traded at 0.23 percent on Friday, down from 0.26 percent late on Thursday. They remain significantly higher than at the beginning of the month, before concerns about a default increased, when they yielded only around 0.02 percent. Discussion that an extension of the debt ceiling would last only around six weeks has also sent yields on bills maturing in late November and early December higher. Yields on Treasuries bills maturing on November 29 jumped to 0.22 percent on Friday, up from 0.12 percent on Thursday and 0.05 percent on Wednesday.