NEW YORK, Dec 9 (Reuters) - U.S. Treasury yields rose on

Monday as traders waited on key inflation data due this week to

see whether stubbornly high price pressures could derail

expectations for a Federal Reserve interest rate cut next week.

The Fed is widely expected to cut rates by 25 basis points

at the conclusion of its Dec. 17-18 meeting, with a pause then

seen as likely in January.

But inflation is key to whether the Fed will continue to cut

rates.

Fed officials including Chair Jerome Powell have said that

recent upticks in its preferred Personal Consumption

Expenditures data reflect a bumpy path to its 2% annual target,

but don't change the overall trend.

"If we see a convincing uptick that the Fed isn't able to

continue using that bumpy excuse on, then that will call into

question whether or not the Fed can deliver a rate cut next

week," said Vail Hartman, U.S. rates strategist at BMO Capital

Markets in New York.

Hartman said a solid to high 0.4% gain in core consumer

prices could raise doubts over a cut next week, but rate

expectations will also depend on producer prices.

Economists expect consumer prices released on Wednesday will

show that both headline and core prices rose by 0.3% in

November, for an annual gain of 2.7% and 3.3%, respectively.

Producer prices released on Thursday are expected to show a

0.2% monthly increase in November in both headline and core, for

a 2.6% and 3.2% annual increase.

The next PCE release is due on Dec. 20.

Benchmark 10-year yields were last up 2.7 basis

points at 4.18%. Interest rate sensitive two-year yields

rose 2.2 basis points to 4.12%.

The yield curve between two-year and 10-year notes

steepened by around a basis point to 6 basis

points.

Traders added to bets of a December rate cut after jobs data

for November released on Friday showed some warning signs that

the labor market was weakening. The unemployment rate rose to

4.2% from 4.1% despite strong jobs gains during the month.

Some underlying details in the report, including a weaker

household survey, also pointed to declining labor market

strength.

"The aggregate data is conforming with the whole slowdown

theme," said Hartman.

Fed officials are now in a blackout period before next

week's meeting.

Traders are also watching geopolitical events after rebels

seized the Syrian capital of Damascus.

Risk appetite was boosted on news that China will adopt an

"appropriately loose" monetary policy next year, the first

easing of its stance in some 14 years, alongside a more

proactive fiscal policy to spur economic growth.