WASHINGTON, Oct 8 (Reuters) - U.S. Treasury yields were

flat to lower in early trading on Wednesday as markets awaited

an auction of 10-year notes and the release of minutes from last

month's central bank meeting.

Investors overwhelmingly expect the Federal Reserve to cut

interest rates again later this month and yet again in December,

in keeping with the Fed's most recent projections, as the labor

market shows signs of stalling.

However policymakers and market players say they are partly

flying blind as a government shutdown, now in its eighth day,

continues to block the release of official economic indicators.

Several key Fed members were due to deliver public remarks

on Wednesday but it was unclear if any would offer clues as to

the path of monetary policy.

Angelo Manolatos, a macro strategist at Wells Fargo ( WFC ),

said the work stoppage in Washington tended to boost demand for

U.S. fixed income.

"Historically, you tend to see Treasuries perform well

during shutdowns," he said, adding that a further deterioration

in a weak labor market as shown by private-sector indicators

could push yields out of their current range-bound pattern.

"Labor market data is going to be king from now through the

end of the year," said Manolatos.

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

was last down 2 basis points to 4.107%. The yield

on the 30-year bond fell 2.4 basis points to

4.702%.

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 54.2 basis points.

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

typically moves in step with interest rate expectations for the

Fed, fell 0.8 basis points to 3.564%.

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

Inflation-Protected Securities (TIPS) was last at

2.419% after closing at 2.42% on October 7.

The 10-year TIPS breakeven rate was last at

2.352%, indicating the market sees inflation averaging about

2.4% a year for the next decade.

The U.S. dollar five-year forward inflation-linked swap

, seen by some as a better gauge of inflation

expectations due to possible distortions caused by the Fed's

quantitative easing, was last at 2.475%.