TREASURIES-Selloff pauses after yields hit four-year highs

(Corrects yields to highest in four years in headline and first

graph)

* Ten-year yields highest since Jan 2014

* Fed seen more aggressive on rate hikes

* Treasury to sell $66 billion notes, bonds this week

By Karen Brettell

NEW YORK, Feb 5 (Reuters) - U.S. Treasury yields recovered

from almost four-year highs reached overnight on Monday as

investors weighed whether a dramatic week-long selloff had run

its course, after improving economic data raised expectations of

further rate hikes this year.

Benchmark 10-year note yields surged to 2.885

percent overnight, the highest since January 2014, following

data Friday that showed hourly wages rose in January.

They fell back to 2.841 percent in morning trading in New (KOSDAQ: 160550.KQ - news)

York.

Signs that inflation is firming have raised some traders'

expectations that the Federal Reserve may hike interest rates

four times this year. Fed officials have indicated that three

rate hikes are likely.

Many investors are reluctant to stand in the way of the

selloff, which has sent the 10-year yields up from a low of

2.654 percent last Monday, until they see signs of

stabilization.

“Even (Taiwan OTC: 6436.TWO - news) if you think it’s gone too far, or even if you think

we’ve sold off a little more than probably warranted at this

point, you don’t really have those buyers that are willing to

step in and stop it until we see some signs of slowing,” said

Blake Gwinn, an interest rate strategist at NatWest Markets in

Stamford, Connecticut.

Declining equity markets in tandem with weaker bonds as

economic growth improves also indicate nervousness about U.S.

central bank policy.

“This is typically the dynamic you see when it's about Fed

expectations,” Gwinn said.

With (Other OTC: WWTH - news) no major economic releases due this week, attention

will turn to supply and speeches by regional Fed presidents.

The Treasury will sell $66 billion in notes and bonds this

week, including $26 billion in three-year notes on Tuesday, $24

billion in 10-year notes on Wednesday and $16 billion in 30-year

bonds on Thursday.

Fed speakers include St. Louis Fed President James Bullard

on Tuesday, and New York Fed President William Dudley, Chicago

Fed President Charles Evans and San Francisco Fed President John

Williams on Wednesday.

Dallas Fed President Robert Kaplan, Minneapolis Fed

President Neel Kashkari and Kansas Fed President Esther George

are also due to speak on Thursday.

(Editing by Bernadette Baum)

)