(Updates as of 1402 ET)

By Alden Bentley

NEW YORK, March 28 (Reuters) - U.S. Treasury yields

firmed in an abbreviated session on Thursday, with an upward

revision to U.S. fourth-quarter economic growth providing little

impetus ahead of the start of the long Easter weekend.

With bond and stock markets closed on Good Friday, Thursday

was a subdued end to a quarter that saw government bond and note

yields rise as the economy looked poised to avoid recession this

year.

Thanks to strong consumer spending and business investment

in nonresidential structures like factories, gross domestic

product increased at a 3.4% annualized rate last quarter,

revised up from the previously reported 3.2% pace, the Commerce

Department said in its third estimate of fourth-quarter GDP.

A report from the Labor Department on Thursday showed

initial claims for unemployment benefits fell 2,000 to a

seasonally adjusted 210,000 for the week ended March 23.

The healthy numbers did not move the needle for the bond

market. Bond traders are more focused on the Federal Reserve's

favored Personal Consumption Expenditures Inflation Index report

to be released by the Commerce Department on Friday, which is

not a government holiday.

The yield on U.S. 10-year notes was up 0.6 basis

point at 4.202% when the market closed at 2 p.m. ET. The

benchmark yield rose about 35 basis points in the first three

months of the year.

Last week the Fed left the fed funds rate in the 5.25% to

5.50% range it has been at since July.

The Fed has said it expects to lower interest rates this

year, and its median dot plot estimate last week still showed 75

basis points in easing for 2024. But the Fed is in no rush to

start cutting rates after recent reports showing inflation

rising and the economy showing little sign of significant

slowing.

"The UK, the euro area and Canada have fewer doubts about

the decline in inflation. The problem is that the Fed is

confronting a situation where there has been an uptick in

inflation in the U.S. in January and February," said Thierry

Wizman, Macquarie's global FX and interest rates strategist in

New York.

"Whether that's a fluke or whether that has to do with

mismeasurement of the data is yet to be seen," Wizman said, "but

logically it should call for a little bit more caution from the

Fed than from the other central banks."

Futures traders currently see about a 63% probability that

the Fed will lower rates by at least 25 basis points at its June

meeting, according to LSEG data.

Fed Chair Jerome Powell will participate in a moderated

monetary policy discussion Friday, meaning the market won't be

able to react to the two most important news events of this week

until Monday.

"All the key data is actually tomorrow instead of today.

It's a very strange week," said Gennadiy Goldberg, head of U.S.

rates strategy at TD Securities, in New York. "It's the age-old

question: 'If PCE falls in the forest, is anyone around to hear

it.'"

The 2-year note yield, which typically moves in

step with interest rate expectations, rose 5.2 basis points on

the day to 4.6221%, and marked a 38 basis-point quarterly rise.

The 30-year bond yield fell 1.2 basis points to

4.3474% on Thursday and was up 33 basis points in the quarter.

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

measuring the gap between yields on 2- and 10-year Treasury

notes, seen as an indicator of economic

expectations, was at a negative 42.4 basis points, about 3 bp

more inverted than at the close of 2023. It was at -37.4 bp late

Wednesday.

(Additional reporting by Herb Lash; Editing by Chizu Nomiyama

and Leslie Adler)