(Updates as of 9:30 am ET)

By David Randall

NEW YORK, April 18 (Reuters) - U.S. Treasury yields

continued to move higher on Thursday as investors weighed

economic data and warnings from Federal Reserve officials that

the decline in inflation may have stalled.

Yields have jumped near five-month highs this week following

stronger-than-expected inflation data last week. Markets are now

pricing in a total of 42 basis points in cuts by the end of this

year, down from more than 160 basis points in cuts expected in

January, and now see the first cut coming in September,

according to CME's FedWatch Tool.

Data from the Labor Department on Thursday showed the number

of Americans filing new claims for unemployment benefits was

unchanged last week, pointing to continued labor market

strength. Initial claims for state unemployment benefits

remained at a seasonally adjusted 212,000 for the week ended

April 13. Economists polled by Reuters had forecast 215,000

claims in the latest week.

"The extremely steady reads on recent claims data suggest

that the trend of solid payroll increases should continue, and

that the unemployment rate will remain solidly below 4%," said

Thomas Simons, US economist at Jefferies.

Federal Reserve officials have noted the continued strength

of the U.S. labor market as a reason to delay cutting interest

rates to avoid a re-acceleration of inflation.

Cleveland Federal Reserve Bank President Loretta Mester said

on Wednesday that she wants to see more confidence that

inflation is easing before the central bank begins cutting

rates.

"At some point, as we get more confidence, we will start to

normalize policy back to a less restrictive stance, but we don't

have to do that in a hurry," Mester said.

Fed Governor Michelle Bowman warned in a separate speech on

Wednesday that "Progress on inflation has slowed, and ... maybe

it is even stalled at this point."

The yield on 10-year Treasury notes was up 2.5

basis points to 4.610%. The yield on the 30-year Treasury bond

was up 1.5 basis points to 4.714%.

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

moves in step with interest rate expectations, was up 2.8 basis

points at 4.961%.