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(Opens U.S. market) By Herbert Lash NEW YORK, Sept 22 - U.S. Treasury yields were little changed on Wednesday as fears of imminent contagion from China Evergrande receded after it settled interest payments on a domestic bond and investors awaited word from the Federal Reserve later in the day. The People's Bank of China injected 90 billion yuan into the banking system, soothing fears of financial fallout from a default by the debt-laden Chinese property developer. The Fed is expected to unveil how it will taper its monthly asset purchases later this year and show in updated projections whether higher-than-expected inflation or a resurgent COVID-19 pandemic further weighs on the economy. A statement from a two-day meeting of the Fed's policy-setting committee is expected at 2 p.m. ET. The yield on the benchmark 10-year Treasury note was down 0.5 basis points at 1.319% as investors awaited the statement and remarks from Fed Chair Jerome Powell. The market consensus expects the Fed as soon as November to begin to reduce its Treasury purchases by $10 billion a month and mortgage-backed security purchases by $5 billion a month. The timeframe could be much slower that people expect, with the consensus view executed on a quarterly basis, not monthly, said Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC. "You need to make sure the system adjusts very slowly to the developments. There's a lot of concern on the committee that if they pull back too quickly, they will cause a problem," Ricchiuto said. The Fed likely will reduce its growth numbers for 2021 and next year, while raising its inflation target for the two years, Ricchiuto said. The unemployment rate target may also be raised a touch, but stagflation will not be part of the picture. "People will read a little bit of stagflation into the numbers, which I don't think is valid. Stagflation isn't possible in the world we live in," Ricchiuto said. 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 109.6 basis points. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 0.6 basis points at 0.222%. The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 2.455%. The 10-year TIPS breakeven rate was last at 2.298%, indicating the market sees inflation averaging about 2.3% a year for the next decade. September 22 Wednesday 10:24AM New York / 1424 GMT Price Current Net Yield % Change (bps) Three-month bills 0.025 0.0253 0.000 Six-month bills 0.04 0.0406 -0.005 Two-year note 99-208/256 0.2221 0.006 Three-year note 99-190/256 0.4623 0.010 Five-year note 99-150/256 0.8358 0.007 Seven-year note 100-4/256 1.1226 0.000 10-year note 99-92/256 1.3192 -0.005 20-year bond 99-64/256 1.795 -0.011 30-year bond 103-96/256 1.8524 -0.005 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 11.25 0.00 spread U.S. 3-year dollar swap 12.25 0.25 spread U.S. 5-year dollar swap 10.50 0.25 spread U.S. 10-year dollar swap 2.25 0.00 spread U.S. 30-year dollar swap -25.00 -0.25 spread (Reporting by Herbert Lash; Editing by Will Dunham)