(Updates as of 1437 ET)

By Alden Bentley

NEW YORK, Aug 19 (Reuters) - Yields on U.S. government

debt eased on Monday as the market counted down to Federal

Reserve Chair Jerome Powell's keynote speech at the Jackson Hole

symposium at the end of the week.

There is little in the way of data to divert attention

before then.

The Conference Board said on Monday its leading economic

index fell 0.6% in July. That was worse than June's 0.2% fall

and the 0.3% decline expected by economists polled by Reuters.

But the index is a secondary indicator and Treasuries stayed in

their narrow ranges.

On Wednesday, the Labor Department will release a

preliminary revision to 2024 payrolls through March, potentially

a market factor if it shows a much different labor picture than

the Fed has been banking on as it moves toward cutting interest

rates.

Flash PMIs, July home sales and weekly unemployment claims

round things out on Thursday but, barring big surprises, are

unlikely to upset markets.

The minutes of the Fed's July meeting will be released on

Wednesday, which will be backward looking when investors are

100% focused on what the Fed will do at its Sept. 17-18 meeting.

"It's super benign. The curve has barely moved, you are not

seeing much happening in peripheral things like swap spreads and

inflation expectations," said Jan Nevruzi, U.S. rates strategist

at TD Securities in New York.

High rates may be on the way out, and Powell could provide

more information about the approach to policy easing in his

Friday speech at the Kansas City Fed's annual conference in

Wyoming.

Fed speakers in recent days have laid the groundwork for

Powell's Jackson Hole remarks.

In an interview with the Financial Times published on

Sunday, San Francisco Federal Reserve Bank President Mary Daly

said it is time to consider adjusting borrowing costs from their

current range of 5.25% to 5.5%.

Minneapolis Fed President Neel Kashkari said the debate

about potentially cutting rates in September is an appropriate

one to have because of a rising possibility of a weakening labor

market, the Wall Street Journal reported on Monday.

"The balance of risks has shifted," Kashkari told the

Journal in an interview conducted on Friday.

"The interesting things of the week will be the (Fed)

minutes and then the benchmark revision on payrolls, both on

Wednesday, and of course Powell on Friday morning," said Lou

Brien, market strategist at DRW Trading in Chicago.

Based on the fed funds futures term structure,

traders see about a 78% chance of a 25 basis points easing of

the policy rate, which has been in its current target range

since the Fed stopped hiking rates in July 2023.

"On the one hand, Powell could just confirm what almost

everyone already assumes: The Fed will cut rates next month. On

the other hand, he could feel no compulsion to confirm it when

there is still employment and inflation data to be released

before the Sept. 18 decision," Will Compernolle, macro

strategist at FHN Financial said in a client note on Monday.

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

fell 2.8 basis points from late Friday to 3.864%.

The two-year note yield, which typically moves in

step with interest rate expectations, fell 0.4 basis point to

4.0618%.

The 30-year bond yield fell 4 basis points to

4.1114%.

The closely watched gap between yields on two- and 10-year

Treasury notes, considered a gauge of growth

expectations, was at negative 20 bps, a bit more inverted than

Friday's negative 17.1 bps.

The implied breakeven inflation rate on 10-year Treasury

Inflation Protected Securities (TIPS) was

slightly higher at 2.0712%.

The five-year TIPS breakeven inflation rate

slipped to 1.9607%, suggesting that investors think annual

inflation will average below the Fed's 2% target rate for the

next five years.