* Fed buys $1.25 bln worth of debt maturing between 2036 and 2043
* Yields flat despite lower-than-expected January U.S. existing home sales
* Next week's U.S. consumer confidence data on investors' horizon
NEW YORK, Feb 21 (Reuters) - U.S. Treasury debt prices held steady on Friday as investors questioned whether a string of weaker-than-expected economic data is due to severe weather impacting activity in the short term or a symptom of a more structural economic slowdown.
Friday's tepid housing sales data kept investors sidelined, analysts said. The market shrugged off a larger-than-expected drop in U.S. existing homes sales, which declined by 5.1 percent in January, the National Association of Realtors reported on Friday.
"We have not been trading particularly well in the face of soft data prior to today. People are really sidelined. They don't know what to do," said David Ader, an interest rate strategists at CRT Capital in Stamford, Connecticut.
Benchmark 10-year Treasury notes were flat, leaving the yield steady at 2.758 percent. That is little changed from Thursday's 2.754 percent close. The thirty-year bond traded up 4/32 in price, pulling the yield down to 3.718 percent versus Thursday's 3.726 percent close.
One strategist pointed toward a potential momentum play that would see buyers coming into the market if the 10-year yield closes in on the 3 percent mark.
"We saw good buying in January and I would imagine those bids would return if we get near those levels in the coming days," said Bill O'Donnell, an interest rate strategist at RBS Securities in Stamford.
Analysts said they expect next week's consumer confidence figures, due on Tuesday, to have a more significant impact on the market.
Incoming data is already expected to be weaker given the severe winter conditions that prevailed through most of the month. The latest consensus estimate of economists polled by Reuters indicates February consumer confidence will decline slightly to 80.4 from 80.7 .
"We know the data is weather-impacted and it will continue to be weather-impacted for many weeks, so I do not think they will be able to sell off much in the wake of all that data," said Ader, indicating the news is already factored into the market.
The Fed, as part of its quantitative easing program, bought $1.25 billion debt maturing between 2036 and 2043 on Friday. The purchases appeared to have little impact on current prices.