NEW YORK, Dec 17 (Reuters) - U.S. Treasury yields edged

higher on Tuesday before the Federal Reserve is widely expected

to cut rates at the conclusion of its two-day meeting on

Wednesday, and signal it will pause further reductions.

"The Fed will be cutting by 25 basis points at the meeting

tomorrow, but more relevantly for forward expectations will be

the (summary of Economic Projections) and Powell's press

conference and how those things factor into the assumed path of

rate cuts in 2025 and beyond," said Vail Hartman, U.S. rates

strategist at BMO Capital Markets in New York.

Fed Chair Jerome Powell is expected to strike a hawkish tone

and repeat that U.S. central bank will remain focused on the

data.

Inflation has remained higher than the Fed's 2% annual

target and many analysts expect policies under the Trump

administration including tariffs could also send price pressures

higher.

Yields pared earlier gains after retail sales increased more

than expected in November. They jumped 0.7% last month, above

economists' expectations for a 0.5% gain, after an upwardly

revised 0.5% gain in October.

While strong, the retail sales report is unlikely to change

the expected outcome of this week's Fed meeting.

Fed policymakers are due to update their economic

projections and interest-rate outlook, known as the "dot plot"

for the first time since September, when they launched the rate

cutting cycle with a 50 basis point reduction.

A 25 basis point cut Wednesday will be consistent with their

expectations for 100 basis points in cuts this year. Fed

policymakers also projected another 100 basis points of cuts

next year, which analysts expect may be revised down to 75 or 50

basis points.

"The market pricing implies that we will see the more

hawkish outcome of those two," said Hartman. "In the event that

we see that less hawkish outcome with 75 basis points, that will

be supportive for the front end of the curve, just given how

hawkish market pricing is in the futures market right now."

Traders are currently pricing in two 25 basis point cuts or

less next year.

Benchmark 10-year note yields were last up 0.2

basis points at 4.401%. They earlier reached 4.442%, the highest

since Nov. 18.

Two-year note yields, which are highly sensitive

to Fed interest-rate policy, rose 1 basis points to 4.26%. They

reached 4.299%, the highest since Nov. 25.

The yield curve between two- and 10-year notes

was little changed on the day at 14.5 basis

points.

Personal Consumption Expenditures data for November due on

Friday will be the next clue on whether inflation is continuing

to moderate.

It is expected to show that headline and core prices rose by

0.2% each in November, for an annual gain of 2.5% and 2.9%,

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