(Updated at 10:30 EST)

By Karen Brettell

March 6 (Reuters) -

Benchmark 10-year U.S. Treasury yields fell to a one-month

low on Wednesday after Federal Reserve Chair Jerome Powell said

that continued progress on inflation "is not assured," though

the central bank still expects to reduce its benchmark interest

rate later this year.

"If the economy evolves broadly as expected, it will likely

be appropriate to begin dialing back policy restraint at some

point this year," Powell said in remarks prepared for delivery

to the House Financial Services Committee.

The comments were largely anticipated as Fed officials

caution that they want to see further progress on inflation

before cutting rates.

"Powell pretty much straight out said that they're done

with rate hikes. That's a big risk the market was concerned

with," said Marvin Loh, senior global macro strategist at State

Street in Boston.

"Certainly, they feel that policy is restricted enough

that it's going to do its job. It's just a matter of how long

it's going to take," Loh added.

Investors are focused on Friday's jobs report for

February for the next clues on when the U.S. central bank is

likely to begin cutting rates.

It is expected to show that employers added 200,000 jobs

during the month, according to economists' polled by Reuters.

Private payrolls increased by 140,000 jobs last month

after rising by an upwardly revised 111,000 in January, the ADP

Employment report showed on Wednesday.

Other data on Wednesday showed that U.S. job openings fell

marginally in January, while hiring declined as labor market

conditions continue to gradually ease.

Will Compernolle, a macro strategist at FHN Financial in

New York, notes that markets are concerned that growth may

"overheat," but adds that this would only be problematic if

inflation is also high.

Thus, next week's Consumer Price Index (CPI) for

February is also key for future Fed moves and market sentiment.

"If the employment report comes in mostly as expected it

all hinges on Tuesday's CPI, because that shows whether this

strong growth is something to be worried about or whether it is

something to celebrate," Compernolle said.

The CPI is expected to show that headline prices rose

0.4% last month, while core prices gained 0.3%.

Benchmark 10-year yields were last down 3 basis

points on the day at 4.112%, and got as low as 4.096%, the

lowest since Feb. 8.

Two-year yields fell 1 basis point to 4.539%. The

inversion in the yield curve between two-year and 10-year notes

deepened by two basis points to minus 43 basis

points.

Fed funds futures traders see a 73% probability the Fed will

begin cutting rates in June, according to the CME Group's

FedWatch Tool.