TREASURIES-US yields extend fall after tepid producer prices data

NEW YORK, July 16 (Reuters) - U.S. Treasury yields extended their decline on Wednesday after data showed tame producer prices last month, suggesting that the Federal Reserve could likely begin to move toward cutting interest rates sooner rather than later.

Headline U.S. producer prices were unchanged in June, data showed, compared with expectations for a 0.2% rise, while core or underlying prices were flat as well.

Following the data, the benchmark 10-year yield fell 2.8 basis points to 4.463% US10YT=RR, down from 4.479% before the data. U.S. two-year yields, which track interest rate expectation, slid 3 bps to 3.929% US2YT=RR. They were at 3.954% before the data's release.