NEW YORK, Sept 27 (Reuters) - U.S. Treasury yields

extended their decline on Friday after data showed inflation in

the world's largest economy continued to ease, boosting the

chances of an outsized interest rate cut at the November

meeting.

The benchmark 10-year yield fell 2.9 basis points (bps) to

3.76%, while the two-year yield slid 2.9 bps to

3.596%.

Data showed the personal consumption expenditures (PCE)

price index, the Federal Reserve's favored inflation measure,

rose 0.1% in August after an unrevised 0.2% gain in July.

Economists had forecast PCE inflation advancing 0.1%. In the 12

months through August, the PCE price index increased 2.2% after

rising 2.5% in July.