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Fed officials suggest potential rate cuts amid economic

uncertainty

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Empire State index rises more than expected

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Miran sees two more rate cuts this year

By Chuck Mikolajczak

NEW YORK, Oct 15 (Reuters) - Longer-dated U.S. Treasury

yields were lower on Wednesday, as the latest comments from U.S.

officials cast some doubt on whether a trade agreement with

China was on the horizon.

Yields moved lower after U.S. Trade Representative Jamieson

Greer described China's major expansion of its rare earths

export controls as a complete repudiation of U.S.-Chinese trade

agreements over the past six months.

In addition, Treasury Secretary Scott Bessent said it is not

clear whether China's recent restrictions on exports of rare

earth minerals represent a split politically inside its trade

negotiating team, but that he doesn't believe Beijing wants to

be an "agent of chaos."

"It's on the trade stuff ... it seems to be keying off of them

for some reason. Nothing seems to be getting done, and if

anything, I think it's China becoming sort of a lone wolf here,"

said Tom di Galoma, managing director at Mischler Financial

Group in Stamford, Connecticut.

"For the most part, the Treasury market's been pretty quiet, the

ranges and yield curve trades have been somewhat subdued, and

we're probably ready for a little bit of a breakout here, one

way or the other."

The yield on the benchmark U.S. 10-year Treasury note

fell 1.1 basis points to 4.011%.

The yield on the 30-year bond fell 2.2 basis

points to 4.602%.

Investors were also still grappling with a lack of U.S.

economic data as the government shutdown drags on to its

fifteenth day.

However, the Federal Reserve Bank of New York said its Empire

State manufacturing index rose to 10.7 in October, up from the

negative 8.7 in September and negative 1.4 estimate of

economists polled by Reuters.

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 a positive 52 basis points.

On Tuesday, Fed Chair Jerome Powell said on Tuesday that

policymakers will take a "meeting-by-meeting" approach to any

further interest rate cuts and that the central bank may be

nearing the end of its quantitative tightening effort to reduce

the size of its holdings, keeping market expectations for the

path of monetary policy largely intact.

Also on Tuesday, Federal Reserve Bank of Boston President

Susan Collins said that rising job market risks argue for

another rate cut.

The two-year U.S. Treasury yield, which typically

moves in step with interest rate expectations for the Fed, rose

1 basis point to 3.489%.

Fed Governor Stephen Miran said on Wednesday that two more cuts

from the central bank this year "sounds realistic."

The breakeven rate on five-year U.S. Treasury

Inflation-Protected Securities (TIPS) was last at

2.366% after closing at 2.354% on Tuesday, its lowest since July

2.

The 10-year TIPS breakeven rate was last at

2.308%, indicating the market sees inflation averaging about

2.3% a year for the next decade.