TREASURIES-Yields stay near month highs after Fed job data comments

(Updates with speeches by Powell, others, updates prices, changes byline) By Matt Tracy NEW YORK, Feb 7 (Reuters) - U.S. Treasury yields held near one-month highs on Wednesday as investors digested comments by Federal Reserve officials following a surprisingly strong January jobs report last week. Addressing the jobs data on Tuesday, Fed Chair Jerome Powell left the door open for raising the Fed's benchmark interest rate higher than the 5.00% to 5.25% peak range that the central bank anticipated before the strong employment showing. New York Federal Reserve President John Williams on Wednesday noted that the Fed has more work to do on rates, but that he still sees a peak rate of 5.25% as "reasonable" with 25-basis-point hike increments currently seen as the best path forward. U.S. employers added 517,000 jobs in January, while the unemployment rate dropped to a 53-year low at 3.4%, the Labor Department reported on Friday. Meanwhile, average hourly earnings increased 0.3% last month after a rise of 0.4% in December. "What the data did last week was pretty much get the market to start pricing in line with the Fed," said John Madziyire, senior portfolio manager and head of Treasuries and Inflation in the Vanguard Fixed Income Group. "We're at a point now where, at least relatively speaking, there is more certainty in terms of the path of the Fed, less volatility in terms of expectations for what the Fed's going to do," he added. Benchmark 10-year yields were last at 3.657%, after earlier reaching 3.692%, the highest since Jan. 6. They are up from a low of 3.333% on Thursday. Two-year yields, meanwhile, were last at 4.454%, after reaching 4.493% on Monday, also the highest since Jan. 6. The release of the consumer price index report for January on Feb. 14 will be the next major piece of U.S. economic data. It is expected to show that headline prices rose 0.5% in the month, while core prices increased 0.4%. "Looking at where rates are now (up 450 basis points) and given the long and variable lags, it makes sense the Fed has now clearly shifted to a more data-dependent pause," said Madziyire. The Treasury Department sold $35 billion in 10-year notes on Wednesday to strong demand, following a weak sale of $40 billion in three-year notes on Tuesday. The 10-year notes sold at a high yield of 3.613%, around 3 basis points below where they had traded before the auction. The bid-to-cover ratio was 2.66 times, the highest since February 2022. Demand for the three-year notes on Tuesday was likely dented by concerns that Powell would take a more hawkish tone on future rate increases, with his comments coming at the same time as the auction. The Treasury will also sell $21 billion in 30-year bonds on Thursday. February 8 Wednesday 3:05PM New York / 2005 GMT Price Current Net Yield % Change (bps) Three-month bills 4.59 4.7084 0.005 Six-month bills 4.74 4.9238 0.000 Two-year note 99-98/256 4.4543 -0.017 Three-year note 99-184/256 4.1006 -0.021 Five-year note 98-146/256 3.8181 -0.026 Seven-year note 98-128/256 3.7462 -0.029 10-year note 103-224/256 3.649 -0.025 20-year bond 101-228/256 3.862 0.000 30-year bond 105-60/256 3.7079 0.002 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 27.25 0.25 spread U.S. 3-year dollar swap 17.50 0.75 spread U.S. 5-year dollar swap 5.50 0.25 spread U.S. 10-year dollar swap -2.75 0.00 spread U.S. 30-year dollar swap -37.50 -0.50 spread (Reporting by Matt Tracy; editing by Jonathan Oatis)