×

TREASURIES-Yields inch higher; Fed speakers in focus

* Fed's Powell, Bullard, Mester to speak

* Yield curve steepens from almost 10-year lows

NEW YORK, June 23 (Reuters) - U.S. Treasuries yields edged higher on Friday as investors waited on Federal Reserve speakers for any new indications on when the U.S. central bank is likely to next raise interest rates, after inflation concerns this week sent the yield curve to almost 10-year lows. The yield curve between five-year notes and 30-year hit its flattest levels in almost 10 years as oil prices declined and concerns lingered over last weeks weaker-than-expected Consumer Price Index report. For the third month in a row, (CPI) was way below expectations, said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee. Continued declines in non-seasonally adjusted consumer prices played a large role in the move, he added. A decline in oil prices despite positive fundamentals added to concerns, Vogel said.

The yield curve was last at 97 basis points

after flattening to 95 basis points on Thursday, the lowest since December 2007.

Benchmark 10-year notes were down 4/32 in price

to yield 2.17 percent, up from 2.15 percent on late Thursday. Fed officials including New York Fed President William Dudley and Boston Fed President Eric Rosengren both took a hawkish tone this week on monetary policy, noting that pausing the tightening cycle could pose risks to the economy. Expectations that the Fed will continue on its tightening course has weighed on short- and intermediate-dated notes, which are the most sensitive to central bank's policy, even as longer-dated debt rallied. Federal Reserve Board Governor Jerome Powell, St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester are all due to speak on Friday. The Fed has emphasized the improving job market and an expectation that inflation will return to targets despite recent declines. The next major economic release, Junes employment report on July 7, will be watched for signs of further improvement in the labor force. If the Fed is going to continue to watch the employment rate while everyone else watches inflation, the Feds probably not going to veer off its course, said Vogel.

(Editing by Lisa Von Ahn)

)