TREASURIES OUTLOOK-Bonds gain as fiscal stimulus seen unlikely near term

* Bonds gain as fiscal stimulus seen delayed

* Investors focusing on Washington reforms

* Oil price declines lowers inflation expectations

By Karen Brettell

NEW YORK, March 22 (Reuters) - U.S. Treasury yields fell on

Wednesday as investors reduced expectations that the Federal

Reserve is likely to adopt a faster path in raising interest

rates and any new fiscal stimulus is seen as unlikely in the

near-term.

President Donald Trump and Republican congressional leaders

appeared on Wednesday to be losing the battle to get enough

support in the House of Representatives to pass their Obamacare

rollback bill.

Delays in passing domestic reforms including healthcare are

seen as likely to push back any new fiscal stimulus, which

investors had anticipated would boost growth and possibly lead

to faster than previously expected rate increases.

“People are losing confidence in a swift moving set of

congressional reform,” said Ian Lyngen, head of U.S. rates

strategy at BMO Capital Markets in New York.

Benchmark 10-year notes gained 11/32 in price to

yield 2.40 percent, down from 2.43 percent on Tuesday.

The 10-year yields earlier dropped to 2.37 percent, the

lowest since Feb. 28. They have fallen from 2.63 percent on

March 14.

“The bond market had repriced higher in terms of yields

looking at what the Fed reaction function might be given that we

might have fiscal stimulus down the road,” said Chirag Mirani,

head of U.S. rates strategy at UBS (LSE: 0QNR.L - news) .

Now (Frankfurt: 11N.F - news) , “the market is going through a realization that this

may take some time or that it may not be the version it was

expecting,” Mirani said.

Oil prices also dipped on Wednesday as rising crude stocks

in the United States underscored an ongoing global fuel supply

overhang despite an OPEC-led effort to cut output.

That has also reduced inflation expectations, which is also

seen as delaying further Fed tightening.

“Oil prices have been declining and that’s helped push

market-based inflation expectations lower,” said Mirani.

Speeches by Fed officials are in focus this week for any new

indications about future interest rate policy.

Fed Chair Janet Yellen is due to speak at a community

development conference on Thursday.

Durable goods data and manufacturing data on Friday will

also be a focus for investors.

(Editing by Nick Zieminski and Grant McCool)