NEW YORK, April 30 (Reuters) - U.S. Treasury yields

seesawed lower after a weaker-than-expected read on first

quarter U.S. growth underscored market reasoning that White

House tariff uncertainty will both weaken growth and increase

inflation in a dreaded "stagflation" scenario.

Gross domestic product decreased at a 0.3% annualized rate

last quarter, the Commerce Department said in its advance

estimate, much weaker that forecast 0.3% growth rate forecast by

economists polled by Reuters, and the 2.4% growth from the

October-December period.

The survey was, however, concluded before data on Tuesday

showed the goods trade deficit surged to an all-time high in

March amid record imports, which prompted a sharp downgrade of

GDP estimates.

At the same time the GDP deflator, a proxy for inflation,

was 3.7%, higher than last quarter's 2.3% and the expected 3.0%.

Lou Brien, market strategist at DRW Trading in Chicago said

it looked like real final sales were the weakest since the

pandemic, and before that since 2009, which may have initially

supported bonds before traders dug into the inflation components

and got out again to lift yields.

But that was also short lived as Wall Street opened sharply

lower in a risk off mood that encompassed the bond market on the

back of the first real economic hit from President Donald

Trump's trade polices.

"Reconsidering, they probably looked over to the inflation

measures, the GDP deflator and the PCE core, both significantly

higher than anticipated. And so there was a little bit of a push

me pull you on the bond market," he said.

The Q1 core Personal Consumption Expenditure price index

came in at 3.5%. The market will turn its attention to March's

monthly PCE price index at 10:00 a.m. EDT/1400 GMT, which ranks

as the Federal Reserves favorite indicator to assess how

inflation is doing against its 2% target.

Earlier, yields ticked lower after the release of the

ADP National Employment report showing 62,000 new jobs in April,

fewer than the previous month's downwardly revised 147,000.

ADP, along with Tuesday's Job Opening's and Labor

Turnover Survey (JOLTS) serve as runway indicators to Friday's

April payrolls report, likely to be the biggest news event of

the week.

The yield on the benchmark U.S. 10-year Treasury note

was off 1.8 basis points from late Tuesday at

4.156%. The yield on the 30-year bond rose 0.4 bp

to 4.652%.

A closely watched part of the U.S. Treasury yield curve

measuring the gap between yields on two- and 10-year Treasury

notes, seen as an indicator of economic

expectations, was at a positive 53.9 basis points, steeper than

late Tuesday's +52 bp.

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

typically moves in step with interest rate expectations,

was 4.3 bp lower at 3.615%.

The breakeven rate on five-year U.S. Treasury

Inflation-Protected Securities (TIPS) was last at

2.304% after closing at 2.292%.

The 10-year TIPS breakeven rate was last at

2.223%, indicating the market sees inflation averaging about

2.2% a year for the next decade.

(Editing by Nick Zieminski)