TREASURIES-Yields slip ahead of manufacturing data to wind down quiet week

NEW YORK, Jan 3 (Reuters) - U.S. Treasury yields eased early on Friday, marking time before the release of a report on December manufacturing that will be the last morsel to trade on in a week still quieted by the year-end holidays.

The Institute of Supply Management adds its purchasing managers index from last month into the mix at 10 a.m. ET/1500 GMT. Manufacturing makes up a far smaller portion of the U.S. economy than the consumption side and the market will be more focused on the string of labor market data coming out next week culminating in Friday's December employment report.

Given low unemployment and stubborn inflation, the Federal Reserve is expected to refrain from easing again this month, with traders in Fed funds futures putting the odds of it standing pat near 90% and chances of the first 25 basis point cut of 2025 coming in March at 50/50.

The Fed reduced interest rates by a full percentage point from September to December, beginning a more accommodative monetary policy after hiking rates from zero to about 5.5% in 2022 and 2023.

There is also uncertainty over how President-elect Donald Trump's promised tariffs, tax cuts and immigration crackdown might affect the economy and already enormous fiscal deficit.

A complicating factor for how fast those policies are implemented is Friday's Republican House members' vote on whether to let Mike Johnson remain Speaker of the House. If he loses the too-close-to-call vote and no other speaker is chosen by Jan. 6, the House will not be able to certify Trump's election victory on that day.

The yield on benchmark U.S. 10-year notes US10YT=RR was 3.2 basis points below Thursday's late level to 4.543%. The 30-year bond US30YT=RR yield fell 3.5 basis points to 4.7629%.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.3 basis points to 4.235%.

The closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was at a positive 30.6 basis points, slightly flatter than +31.5 bp late Thursday.

(Editing by Daniel Wallis)