NEW YORK, May 24 (Reuters) - U.S. Treasury yields were

little changed to slightly higher on Friday in choppy trading

after yet another report suggesting that the world's largest

economy is far from slowing down, which is likely to push the

Federal Reserve to hold off cutting interest rates this year.

Volume is thinner than usual ahead of the Memorial Day

holiday on Monday.

Friday's data showed new orders for key U.S.-manufactured

capital goods rose more than expected in April and shipments of

these goods also increased, which indicated that business

spending on equipment picked up early in the second quarter.

Non-defense capital goods orders excluding aircraft, a

closely-watched proxy for business spending plans, gained 0.3%

last month after an upwardly revised 0.1% dip in March, the

Commerce Department's Census Bureau said on Friday.

Economists polled by Reuters had forecast these so-called

capital goods orders edging up 0.1% after declining by a

previously reported 0.2% in March.

Friday's numbers followed equally robust data on Thursday,

which showed that U.S business activity accelerated to its

highest level in more than two years in May and initial jobless

claims dropping in the latest week as labor market tightness

persisted.

In all likelihood, Thierry Albert Wizman, global FX and

rates strategist, at Macquarie in New York said the Fed's dot

plot, or its interest rate forecasts, in the medium to long term

will be higher, citing the central bank's minutes released

earlier this week which said there are potentially inflationary

factors within that time frame.

"What this means is that the market is getting a little bit

worried that even though that we continue to expect that the Fed

will cut, the extent of the easing cycle will not be that

great," Wizman said.

"Maybe we'll get 75 or 100 basis points in cuts and then

we'll kind of level off at 4%. And if that's the case and you

believe that the yield curve will be upward sloping, then we're

going to settle at a 10-year yield of slightly above 4%, or

maybe 4.75% looks better or right in that context."

The benchmark U.S. 10-year yield advanced to a more than

one-week peak of 4.502% and was last marginally up at 4.478

. For the week, the 10-year yield gained 5.9 basis

points (bps), on pace for its biggest weekly gain since

mid-April.

U.S. 30-year yields edged up to 4.583%.

On the shorter end of the curve, the U.S. two-year yield,

which typically reflects rate move expectations, inched up to

4.939%. Earlier in the session, it hit 4.959%,

matching a three-week peak touched on Thursday.

On the week, two-year yields posted an 11.5 basis-point

gain, on track for its largest weekly rise since the week of

April 8.

The U.S. yield curve, meanwhile, was little changed from

late on Thursday. The spread between U.S. two- and 10-year

yields, which historically has predicted the onset of recession,

was last at minus 46.3 bps.

That curve widened by as much as minus 47.7 bps on Thursday

following a strong business activity report, the most inverted

since March 12.

Following the durables data, U.S. rate futures priced in one

rate cut of 25 bps in 2024, possibly starting in September or

November, according to LSEG's rate probability app. For the last

few weeks, the futures market had been pricing in two cuts due

the weaker-than-expected economic data.