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* U.S. housing starts fall, briefly push yields lower
* Investors consolidate positions ahead of quiet holiday period (Recasts, updates prices, adds comment, table, byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 16 (Reuters) - U.S. Treasury debt yields inched higher on Friday, continuing a trend that has been in place for several weeks, with investors consolidating some positions ahead of what is expected to be a quiet holiday period for economic data.
Benchmark U.S. 10-year yields were on track for six straight weeks of gains.
The Federal Reserve's interest rate forecasts on Wednesday showed three more rate increases in 2017, accelerating a selloff that started with the victory of U.S. President-elect Donald Trump on the expectation of more inflationary infrastructure and fiscal spending.
"We took direction from the Fed, but over the next couple of weeks, we'll see some more cleaning up of positions heading into the year-end," said Tom Simons, money market economist at Jefferies & Co in New York.
"Next week and the week after are going to be pretty thin with the holidays coming up and people taking off. There's not a lot of news on the calendar until the U.S. employment report on January 7."
A sharp drop in U.S. housing starts for November briefly weighed on yields, which move inversely to prices.
Data showed U.S. new housing projects dropped 18.7 percent to a seasonally adjusted annual rate of 1.09 million units. October's starts, however, were revised up to a 1.34 million-unit rate, the highest since July 2007.
Economists polled by Reuters had expected housing starts to fall to a 1.23 million-unit rate in November.
In mid-morning trading, 10-year Treasury prices were down 4/32, yielding 2.593 percent, up from Thursday's 2.578 percent. On the week, 10-year yields have gained nearly 13 basis points.
U.S. 30-year bond prices were down 13/32, yielding 3.167 percent, up from 3.145 percent late on Thursday.
Yields on U.S. two-year notes, the maturity most sensitive to interest rate expectations, were at 1.256 percent, down slightly from 1.264 percent the previous session. The note has gained 12 basis points in yield this week.
The yield curve was also flatter, with the spread between U.S. 5-year notes and 30-year bonds hitting as narrow as 103 basis points. That was the flattest since early September, as investors priced in aggressive tightening by the Fed next year. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Meredith Mazzilli)