MUMBAI, June 13 (Reuters) - Indian government bond

yields declined on Thursday, as U.S. Treasury prices jumped

after softer-than-expected U.S. inflation print boosted bets of

rate cuts, despite the Federal Reserve projecting only one cut

this year.

India's benchmark 10-year yield ended at

6.9872%, following its previous close of 7.0121%.

U.S. yields dropped and stayed around the 4.30% level as

inflation data showed consumer prices were unchanged

month-on-month in May, following a 0.3% increase in April and

below the 0.1% estimate.

For the 12 months through May, U.S. inflation advanced 3.3%

versus 3.4% in April and a similar market expectation.

The Fed said the 2% inflation goal was likely to be achieved

at a slower pace than previously expected and slashed its

forecast to only one 25-basis-point rate cut in 2024, down from

three cuts forecast in March.

The futures markets, however, ignored the Fed's hawkish

guidance, and are currently pricing in 44 bps of cuts in 2024,

with the odds for such an action in September rising to 61% from

53%, according to the CME FedWatch tool.

"Given current conditions, the earliest the Fed rate cut

cycle could start from is September. The Fed will have three

more CPI prints by the September policy to assess the durability

of the disinflation process. The April and May CPI prints have

shown some moderation," said Gaura Sen Gupta, chief economist at

IDFC First Bank.

Back home, India's retail inflation rate eased slightly in

May to 4.75% from 4.83% in April, lower than the 4.89% forecast

in a Reuters poll.

Still, investor uncertainty likely curbed the fall in Indian

bond yields.

Investors are likely to wait for clarity on India's fiscal

consolidation path in the forthcoming government budget before

propelling the next leg of a bond market rally, Aditya Bagree,

head of markets at Citi India.

(Reporting by Dharamraj Dhutia; Editing by Janane Venkatraman

)