(Updates as of 1419 ET)

By Alden Bentley

May 8 (Reuters) -

U.S. Treasury yields firmed on Wednesday as investors

weighed the chances that the Federal Reserve will lower rates

one or more times this year while digesting a plenitude of new

Treasury debt and awaiting important inflation data next week.

New supply has been the theme in a week lacking in

market-moving economic reports. On Wednesday, the Treasury sold

$42 billion in 10-year notes at a high yield of 4.483%, a smidge

under where the when-issued appeared to be trading on the

screens around the close of bidding. The bid-to-cover ratio, an

indicators of demand, was 2.49.

That followed a three-year note auction on Tuesday that

saw healthy demand.

Gennadiy Goldberg, head of U.S. rates strategy at TD

Securities in New York said that despite a small tail -- the

difference between the average price and the lowest bid that got

a 10-year note at the auction -- it and the bid-to-cover were in

line with recent averages.

The 10-year yield ticked slightly higher

after the auction, which can be a sign of disappointment, and

was last up 3.1 basis points on the day at 4.492%.

"I would say despite the tail at the auction, it was

still relatively strong," Goldberg said.

The 2-year note yield, which typically moves

in step with interest rate expectations, was up 1.3 basis points

at 4.8407%.

The U.S. Treasury yield curve spread between yields on two-

and 10-year Treasury notes, seen as an indicator of

economic expectations, was negative 38.3 basis points, more

inverted than -34.8 basis points late Tuesday.

The 30-year bond yield was up 2.7 basis points

at 4.6318%. The Treasury will sell $25 billion of 30-year bonds

on Thursday.

Yields fell sharply on Friday on news that the economy

created fewer than expected jobs in April. The report

accelerated a bond rally after the Federal Open Market Committee

said the recent uptick in inflation and economic growth were

unlikely to derail rate cuts this year. The Federal Reserve all

but ruled out rate hikes.

The 10-year yield hit its lowest since April 10 on Tuesday,

while on Friday the yield on the 2-year note fell to the lowest

since April 5.

The April Producer Price Index report comes on Tuesday, and

the closely followed CPI number next Wednesday, which will

provide insight on whether inflation has resumed its downward

trend toward the Fed's 2% target rate.

This week brought a full roster of Fed speakers to fine tune

the message from last week's FOMC meeting, which left the fed

funds rate in the 5.25%-5.50% range its been in since July.

On Wednesday Boston Fed President Susan Collins said

there were risks to cutting rates too soon but she was

optimistic the Fed's current policy will help slow the economy

and can get inflation to target in a reasonable time frame.

In the fed funds futures market, traders are pricing in a

66% chance the Fed will pivot in September with at least a 25

basis point cut at that meeting, unchanged from Tuesday. The

second cut is being bet on for December.

The number of cuts expected in 2024 by the market has

come down from six or seven earlier this year, as inflation

picked back up and economic growth stayed healthy.