TREASURIES-Prices inch higher before Fed meeting statement

* Fed meeting statement in focus

* Treasury to sell $34 bln five-year notes

* Three-month T-bill yields elevated on debt ceiling concerns

NEW YORK, July 26 (Reuters) - U.S. Treasury prices gained slightly on Wednesday as investors waited on the Federal Reserve's statement from its two-day July meeting to see if the U.S. central bank gives any new indications about when it will begin paring its bond holdings and next raise interest rates. Many analysts and investors expect the Fed to announce that it will begin reducing its bond portfolio at its September meeting, but will be watching for any hints on the timing at this week's meeting. Further interest rate hikes are not seen as likely until at least December. Futures traders are pricing in a 52-percent chance that the Fed will raise rates at its December meeting, according to the CME Group's FedWatch Tool. Even with no large changes anticipated in Wednesday's statement, we have to be on guard in case either the Fed does say something, or they say enough to allow a different interpretation from the market, said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee.

Benchmark 10-year notes gained 3/32 in price to

yield 2.32 percent, down from 2.33 percent on Tuesday. The Treasury Department will sell $34 billion in five-year notes on Wednesday, the second sale of $88 billion in new coupon-bearing supply this week. A $26 billion sale of two-year notes on Tuesday saw strong demand. The U.S. will also sell $28 billion in seven-year notes on Thursday.

Yields on three-month Treasury bills that are due

in October remained elevated on concerns that payments on debt due in the month will be delayed if Congress fails to raise the debt ceiling before the Treasury runs out of funds. Discord among Republicans on healthcare legislation has increased fears that budget negotiations will also be acrimonious, leading lawmakers to delay raising the debt ceiling. The Congressional Budget Office said last month that Congress would need to increase the debt limit by early to mid-October to avoid a default.

Yields on Treasury bills that mature on Oct. 26

last traded at 1.16 percent after rising to 1.20 percent on Tuesday, the highest level since October 2008. U.S. Senate Republicans narrowly agreed on Tuesday to open debate on a bill to end Obamacare, but the party's seven-year effort to roll back Democratic President Barack Obama's signature healthcare law still faces significant hurdles.

(Editing by Nick Zieminski)