TREASURIES-Most U.S. yields inch higher at start of holiday-shortened week

(Adds details, trader quote, updates prices) By Davide Barbuscia and David Randall NEW YORK, Nov 21 (Reuters) - U.S. Treasury yields across most maturities inched higher at the start of a holiday-shortened week on Monday amid expectations of further Federal Reserve interest rate hikes, while the yield curve remained deeply inverted on concerns the central bank's tightening will weigh on economic growth. Longer-duration Treasury yields, such as those on 20- and 30-year Treasuries, dipped slightly, but yields on bonds with maturities ranging from two to 10 years climbed, as investors continued to re-price expectations for how high the Fed will hike rates as it attempts to bring inflation down from close to 40-year highs. "What you continue to see is the higher terminal rate on the front end that has rebounded since the CPI (consumer price index) print two weeks ago has continued to pressure long-end rates," said John Luke Tyner, a fixed income analyst and trader at Aptus Capital Advisors. Short-term bond yields, which move inversely to prices, tend to more closely reflect monetary policy expectations than longer-dated ones, which are more indicative of broader market and economic concerns. Fed funds futures traders on Monday were pricing the central bank's policy rate to rise to a high of 5.07% by June, up from expectations of about 4.9% earlier this month, when data showed softer-than-expected consumer and producer price pressures for October. Since then, however, several Fed officials have stressed the need to continue raising rates in order to tame stubbornly high inflation. On Monday, San Francisco Fed President Mary Daly said she was still expecting the U.S. central bank to push rates higher and that it will likely lift its interest rate target to around 5%. The current federal funds rate stands at between 3.75% and 4.00%. The bond market will be closed on Thursday for the Thanksgiving holiday and will close early on Friday. The Treasury market will likely remain volatile over the remaining weeks of the year as seasonal liquidity dries up, said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets. "We're anticipating choppy price action characterized by disproportionately large moves in U.S. rates based on flows and developments that in more typical conditions wouldn't warrant a response," he said. The yield on 10-year Treasury notes was up marginally, at 3.826%, while the yield on the 30-year Treasury bond was down 2 basis points at 3.907%. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up nearly 4 basis points at 4.548%. 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 -72.3 basis points. The Treasury Department sold $42 billion in two-year notes on Monday at a high yield of 4.505% and $43 billion in five-year notes at a high rate of 3.974%. November 21 Monday 3:00PM New York / 2000 GMT Price Current Net Yield % Change (bps) Three-month bills 4.1175 4.2162 -0.034 Six-month bills 4.475 4.6392 0.002 Two-year note 99-174/256 4.548 0.038 Three-year note 100-134/256 4.3107 0.031 Five-year note 100-128/256 4.0119 0.014 Seven-year note 100-104/256 3.9322 0.010 10-year note 102-116/256 3.8269 0.009 20-year bond 98-32/256 4.1388 -0.008 30-year bond 101-160/256 3.9075 -0.020 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 31.00 -1.00 spread U.S. 3-year dollar swap 15.25 -0.25 spread U.S. 5-year dollar swap 6.00 0.50 spread U.S. 10-year dollar swap -1.25 0.75 spread U.S. 30-year dollar swap -43.75 0.00 spread (Reporting by Davide Barbuscia and David Randall; Editing by Bernadette Baum and Paul Simao)