TREASURIES-After volatile swings, bonds ending week little changed

* Investors seen squaring positions for weekend

* U.S. budget seen increasing debt issuance

NEW YORK, Feb 9 (Reuters) - Benchmark 10-year note yields were set to close the week little changed on Friday, after a volatile week of trading, as investors are likely wary of holding positions over the weekend. Bond yields have jumped in the past two weeks as rising inflation and other economic data has led investors to adjust for the prospect of faster economic growth and the possibility the Federal Reserve will raise interest rates faster than previously expected. Rising bond yields, however, have spooked equity investors, who worry that higher rates may dent growth. Volatility in equities has at times added a bid to hold low risk U.S. government debt. Given some of the sharp movements weve seen in the past week people will be a little bit more worried about going home short than they normally would. I think that helps provide some support today, said Michael Cloherty, head of U.S. rates strategy at RBC Capital Markets in New York.

Benchmark 10-year notes were last down 2/32 in

price to yield 2.855 percent, near where they ended at last Friday. For most of the week they have traded near the high end of the range between a four-year high of 2.885 percent and a low of 2.648 percent both reached on Monday. Rising U.S. debt issuance is expected to weigh on bond prices in the coming months. The U.S. House of Representatives joined the Senate early on Friday morning in approving a budget bill that raises military and domestic spending by almost $300 billion over the next two years. With no offsets in the form of other spending cuts or new tax revenue, that additional spending will be financed with borrowed money. This is a larger effect on the deficit over the next two years than the tax bill by a significant margin, said Cloherty. Issuance is also expected to jump as the Treasury rebuilds its cash position after the countrys debt ceiling was lifted until March 2019. The Treasury has already begun to increase the size of its public auctions to make up for declining purchases by the Federal Reserve, which analysts say may have added to the softness of $66 billion in new sales of three-, 10- and 30-year debt this week. The U.S. central banks purchases have not been included in the bond sales, which previously enabled the Treasury to lower public auctions sizes.