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TREASURIES-U.S. yields rise off 15-month lows as equities steady

Karen Brettell

(Adds auction results, Fed officials' comments, updates prices)

* Risk appetite appears to improve

* U.S. GDP growth slowed in fourth quarter

* Treasury sells $32 bln in 7-year notes to strong demand

NEW YORK, March 28 (Reuters) - Benchmark 10-year Treasury yields rose off 15-month lows on Thursday as U.S. stocks were little changed and investors continued to adjust to a dovish pivot from global central banks. Treasuries have rallied strongly since the Federal Reserve last week dramatically abandoned projections for any interest rate hikes this year. I would expect a bit of a consolidation phase after the very sharp move downward in yield weve experienced in the last week and a half, said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott in Philadelphia. Were taking our cues from equity markets into quarter-end. So much is wrapped around risk sentiment. Stocks swung between gains and losses with no major moves either way.

Ten-year notes fell 1/32 in price to yield 2.375

percent, after dropping to 2.340 percent in overnight trading, the lowest level since December 2017. The yield curve between three-month bills and 10-year notes remained inverted by six basis points. The inversion, if it persists, would indicate a recession is likely in one to two years. Data on Thursday showed that the U.S. economy cooled more than initially thought in the fourth quarter, keeping growth in 2018 below the Trump administration's 3 percent annual target, and corporate profits failed to rise for the first time in more than two years. Fed Vice Chair Richard Clarida said the United States' deepened overseas trade and financial ties have exposed it to increasing "spillovers" that central bankers cannot ignore in

setting policy. Clarida, who was speaking in Paris

at the French central bank, said the Fed is prepared to roll out an unconventional monetary policy if the economy hits unexpected trouble. New York Fed President John Williams, speaking in Puerto Rico, said the U.S. economy is in a very good place and that the yield curve inversion does not necessarily imply an upcoming recession. Interest rate futures traders are pricing in a 71 percent chance of a rate cut by December, according to the CME Group's FedWatch Tool. The Treasury sold $32 billion in seven-year notes on Thursday to strong demand, the final sale of $113 billion in new coupon-bearing supply this week. The high yield was one basis point below where the notes traded before the auction.

The government sold $41 billion to robust demand on Tuesday while a $40 billion sale of five-year notes on Wednesday was also solid.

(Reporting by Karen Brettell Editing by Leslie Adler)