(Updates to New York afternoon trading)

By Karen Brettell, Douglas Gillison

Jan 31 (Reuters) - U.S. Treasury yields rose on Friday,

a day ahead of new U.S. tariffs to be levied on imports from

Mexico, Canada and China, and as traders weighed data showing

strong consumer spending and a moderate increase in inflation in

December.

President Donald Trump on Saturday will implement tariffs of 25%

on Canadian and Mexican imports and 10% on Chinese goods with

immediate effect, White House spokesperson Karoline Leavitt said

on Friday.

Uncertainty over the impact of tariffs is muddying the

outlook on the economy, with details on the implementation,

including whether there will be exemptions, also unsure.

"There's a lot of uncertainty about tariffs and really what

comes next on that front," said Gennadiy Goldberg, head of U.S.

rates strategy at TD Securities in New York.

The 2-year note yield, which typically moves in

step with Fed interest rate expectations, was last up 3.5 basis

points on the day at 4.232%.

The yield on benchmark U.S. 10-year notes rose

5.9 basis points to 4.571%.

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

steepened by around 2 basis points to 33.7 basis

points.

Yields briefly jumped earlier on Friday after data showed

that consumer spending, which accounts for more than two-thirds

of U.S. economic activity, beat estimates with a 0.7% jump

during December.

Meanwhile, the core personal consumption expenditures (PCE)

price index rose 0.2% last month, in line with economists'

expectations, for an annual gain of 2.8%. The headline PCE price

index rose 0.3% last month for an annual gain of 2.6%.

"The very strong personal income spending data continues to

suggest that the consumer remains resilient. At the same time,

you do have inflationary pressures continuing to fade," Goldberg

said. "It really underscores that the Fed can keep rates on

hold, at least for the next meeting or so if data like this

continues."

Fed Chairman Jerome Powell said on Wednesday that the U.S.

central bank wants to see further progress in inflation before

cutting rates, but also expressed confidence that it remains on

the right path to ease back closer to the Fed's 2% annual

target.

Chicago Fed President Austan Goolsbee said Friday's inflation

data was a bit better than expected and gives him comfort that

inflation is on a path to the 2% target, adding that he still

expects the U.S. central bank's policy rate to be "a fair bit"

lower in 12 to 18 months.

Fed governor Michelle Bowman said on Friday she still expects

declining inflation to allow further interest rate cuts this

year, but feels rising wages, buoyant financial markets,

geopolitical risks and upcoming administration policies could

slow the process and keep price pressures elevated.

Annual inflation data should cool in the coming months due

to favorable comparisons with hot readings from a year ago,

weighing in favor of lower interest rates, said Stan Shipley,

macro research analyst at Evercore ISI.

The Treasury will also release its refunding estimate for

the coming quarters next week, with its broad borrowing estimate

due on Monday and its more detailed estimate due on Wednesday.