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TREASURIES-Yields rise as falling inflation seen unlikely to delay rate hikes

(Adds data, updates prices)

* Inflation cools in May

* 10-year note yields highest in six weeks

* Fed minutes, payrolls in focus next week

NEW YORK, June 30 (Reuters) - U.S. Treasury yields rose on Friday as inflation data was not seen as weak enough to delay the Federal Reserves expected path on interest rate hikes, and as investors worried about less accommodative central banks in Europe. The personal consumption expenditures (PCE) price index fell 0.1 percent in May from April and, when food and energy were excluded, was up 0.1 percent. The 12-month reading for the so-called core inflation has been slowing since February, although Fed Chair Janet Yellen earlier this month said the dip was likely temporary. Its not enough to make you optimistic about either delaying the Fed or about the potential for actual inflation, said Aaron Kohli, interest rate strategist at BMO Capital Markets in New York. Fed officials have indicated another rate hike this year is likely, while the U.S. central bank is also likely to begin slowly reducing its bond holdings. Other data on Friday showed that U.S. consumer spending rose modestly in May. The University of Michigan's consumer sentiment index fell also fell this month to its lowest since November.

Benchmark 10-year notes fell 7/32 in price to

yield 2.29 percent, after reaching an more than six-week high of 2.30 percent overnight, up from 2.27 percent late on Thursday. The yields have risen from 2.13 percent on Tuesday on concerns that European central banks would also be less accommodative at the same time as the Fed continues its tightening path. The 10-year notes are on track for their biggest weekly yield increase since the week ending March 3. European Central Bank President Mario Draghi said on Tuesday the ECB might tweak its stimulus so it does not become more accommodative as the economy recovers. Sources on Wednesday, however, said he had not intended to signal imminent tightening.

Bank of England Governor Mark Carney said on Wednesday that a rise in British interest rates is likely to be needed as the economy comes closer to running at full capacity. Next Fridays U.S. employment report for June will be the next major economic release to give guidance on the Feds next rate hike. The U.S. central bank is also due to release minutes from its June meeting on Wednesday.

(Editing by Meredith Mazzilli and Chizu Nomiyama)

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