UPDATE 1-Demand fair for 5-year Treasury notes in near-record supply week

(Adds details on five-year note auction)

NEW YORK, Feb 21 (Reuters) - Investors showed fair demand for the $35 billion of five-year notes auctioned by the U.S. Treasury Department on Wednesday, part of a bumper sales week as the government boosts issuance to help fund President Donald Trump's tax overhaul and a two-year budget deal.

This week's issuance of $258 billion is the second-largest amount ever over a three-day period and just $1 billion short of the all-time high set in August 2010.

The federal debt load is expected to swell by as much as $1.5 trillion because of the tax overhaul signed into law in December, while the budget agreement would boost government spending by almost $300 billion over the next two years.

Overall it was a pretty fair auction. Treasuries have been very quiet today so the auction came in on the screws, said Justin Lederer, analyst at Cantor Fitzgerald in New York.

The auction showed direct bidders taking 12.7 percent, the highest since August 2017. Indirect bidders took 58 percent of the offer, the smallest since April 2017, and dealers took 29.3 percent.

The Treasury notes sold at a yield of 2.658 percent versus 2.660 percent at the bid's close, with a 2.44 bid-to-cover ratio, slightly below last month's 2.48. The ratio indicates the demand for a Treasury offering relative to the number of investor bids.

The five-year Treasury yield was little changed following the auction, last at 2.648 percent.

Earlier on Wednesday, Treasury auctioned two-year floating rate notes to weak demand. The 2.75 bid-to-cover ratio was the lowest on record since the issue was introduced in January 2014, according to Tom Simons, senior money market economist at Jefferies LLC in New York.

Expectations the Federal Reserve could raise interest rates as many as four times in 2018 had helped propel the two-year Treasury yield to a nine-year high of 2.282 percent in overnight trading. (Reporting by Kate Duguid; Editing by Megan Davies and Meredith Mazzilli)