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TREASURIES-Investors push down yields ahead of Powell remarks

 (Updates with market activity, details on 30-year TIPS)
    By Ross Kerber
    Feb 22 (Reuters) - Investors pushed U.S. Treasury yields
down from milestone highs on Monday and looked ahead to remarks
U.S. Federal Reserve chairman Jerome Powell is set to give on
Tuesday in Washington.
    The benchmark 10-year yield was up two basis
points at 1.3653% in afternoon trading. It had been as high as
1.394% overnight, the highest since February 2020, on
expectations of faster U.S. growth and inflation, then fell back
with equity markets.
    Powell is scheduled to speak Tuesday before the Senate
Banking Committee, and investors will be watching to see if he
offers any changes to the central bank's dovish outlook of 
recent months as it looks to shepherd the economy through the
COVID-19 pandemic.
    Bryn Mawr Trust Director of Fixed Income Jim Barnes said
investors will watch to see if Powell gives a more optimistic
assessment of U.S. economic growth and for signs it might be
quicker to act to control inflation.
    Doing so could help bring down the TIPS break-even inflation
rate. The 10-year U.S. TIPS break-even inflation rate
 was at 2.17% and has been above 2% since Jan 27.
    "If there's anything that can break the streak of higher
yields, it can be the Fed," Barnes said.
    The S&P 500 and Nasdaq indexes came under pressure on Monday
as higher Treasury yields and prospects of rising inflation
triggered valuation concerns, hitting shares of high-flying
growth companies.
    On Friday, the yield on 30-year U.S. TIPS rose above zero
for the first time since June, and it stood at 0.049% on Monday
afternoon.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 125 basis points, about two basis points
higher than Friday's close and the highest since 2017.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up less than
a basis point at 0.1129%.
        
      February 22 Monday 2:12PM New York / 1912 GMT
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.03         0.0304    -0.003
 Six-month bills               0.045        0.0456    0.005
 Two-year note                 100-6/256    0.1129    0.004
 Three-year note               99-182/256   0.2225    0.008
 Five-year note                98-240/256   0.5937    0.013
 Seven-year note               98-96/256    0.993     0.014
 10-year note                  97-196/256   1.3653    0.020
 20-year bond                  97-196/256   2.0114    0.032
 30-year bond                  93-124/256   2.1719    0.032
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         9.25         0.00    
 spread                                               
 U.S. 3-year dollar swap        10.75         0.25    
 spread                                               
 U.S. 5-year dollar swap        13.00         0.00    
 spread                                               
 U.S. 10-year dollar swap        8.25        -0.25    
 spread                                               
 U.S. 30-year dollar swap      -23.25        -2.00    
 spread (Reporting by Ross Kerber in Boston; editing by Nick Zieminski
and Mark Heinrich)
  
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