NEW YORK, March 28 (Reuters) - U.S. Treasury yields had

a relatively muted response to the release on Friday of the U.S.

Personal Consumption Expenditure data, the Federal Reserve's

favored indicator for inflation.

The Personal Consumption Expenditures (PCE) price index

increased 0.3% in February, in line with forecasts, after

advancing by an unrevised 0.3% in January. In the 12 months

through February, prices increased 2.5%, matching January's

rise.

Yields edged higher immediately after the data but then

pared back those increases and were last seen declining

marginally, with the 10-year yield last at 4.31%,

about two basis points below where it was before the data and

about six points lower on the day.