(Adds comments, background, updates prices)

By Tom Westbrook and Stefano Rebaudo

Nov 25 (Reuters) - Treasuries rallied in London trade on

Monday as bond investors cheered the selection of fund manager

Scott Bessent as a candidate for U.S. Treasury secretary,

reckoning on a steady hand on government finances.

Bessent is seen as a voice for markets in incoming U.S.

President Donald Trump's administration and as a fiscal

conservative who would keep a leash on U.S. deficits.

Benchmark 10-year U.S. Treasury yields, up 80

basis points since September, fell 6.5 basis points to 4.34%,

after hitting 4.326%, the lowest level since Nov. 12.

"The market view is that Bessent is a 'safe hands'

candidate," said Stephen Spratt, strategist at Societe Generale.

Bessent said "in August that attacking the U.S. national

debt should be a priority, which includes slashing government

programs and other spending," Spratt said.

Markets have fretted for weeks about a potential rebound in

inflation and an increase in the federal budget deficit from

Trump's economic plans, such as tax cuts and import tariffs.

Two-year yields fell 2.5 bps to 4.34% and 30-year

yields were down 7 bps at 4.52%.

Yields fall when bond prices rise.

If sustained, the rally would be one of the biggest for the

bond market in several weeks and may have wrong-footed momentum

funds following months of rising yields.

"My sense is that this (rally) is also a function of

positioning after the rise in yields and dollar strength over

the last six weeks," said Nick Ferres, chief investment officer

at Vantage Point Asset Management in Singapore.

Pricing for near-term interest rate cuts in the United

States, which has pushed out over recent weeks on signs of a

strong U.S. economy, was little changed in Asia.

Markets price about a 50% chance of a 25 basis point cut at

the U.S. Federal Reserve's December meeting.

(Reporting by Tom Westbrook and Stefano Rebaudo; Editing by

Kate Mayberry and Emelia Sithole-Matarise)