TREASURIES-Longer-dated US yields dip amid trade concerns

By Chuck Mikolajczak

NEW YORK, Oct 15 (Reuters) - Longer-dated U.S. Treasury yields were lower on Wednesday, as the latest comments from U.S. officials cast some doubt on whether a trade agreement with China was on the horizon.

Yields moved lower after U.S. Trade Representative Jamieson Greer described China's major expansion of its rare earths export controls as a complete repudiation of U.S.-Chinese trade agreements over the past six months.

In addition, Treasury Secretary Scott Bessent said it is not clear whether China's recent restrictions on exports of rare earth minerals represent a split politically inside its trade negotiating team, but that he doesn't believe Beijing wants to be an "agent of chaos."

"It's on the trade stuff ... it seems to be keying off of them for some reason. Nothing seems to be getting done, and if anything, I think it's China becoming sort of a lone wolf here," said Tom di Galoma, managing director at Mischler Financial Group in Stamford, Connecticut.

"For the most part, the Treasury market's been pretty quiet, the ranges and yield curve trades have been somewhat subdued, and we're probably ready for a little bit of a breakout here, one way or the other."

The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB fell 1.1 basis points to 4.011%.

The yield on the 30-year bond US30YT=TWEB fell 2.2 basis points to 4.602%.

Investors were also still grappling with a lack of U.S. economic data as the government shutdown drags on to its fifteenth day.

However, the Federal Reserve Bank of New York said its Empire State manufacturing index rose to 10.7 in October, up from the negative 8.7 in September and negative 1.4 estimate of economists polled by Reuters.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=TWEB, seen as an indicator of economic expectations, was at a positive 52 basis points.

On Tuesday, Fed Chair Jerome Powell said on Tuesday that policymakers will take a "meeting-by-meeting" approach to any further interest rate cuts and that the central bank may be nearing the end of its quantitative tightening effort to reduce the size of its holdings, keeping market expectations for the path of monetary policy largely intact.

Also on Tuesday, Federal Reserve Bank of Boston President Susan Collins said that rising job market risks argue for another rate cut.

The two-year US2YT=TWEB U.S. Treasury yield, which typically moves in step with interest rate expectations for the Fed, rose 1 basis point to 3.489%.

Fed Governor Stephen Miran said on Wednesday that two more cuts from the central bank this year "sounds realistic."

The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) US5YTIP=TWEB was last at 2.366% after closing at 2.354% on Tuesday, its lowest since July 2.

The 10-year TIPS breakeven rate US10YTIP=TWEB was last at 2.308%, indicating the market sees inflation averaging about 2.3% a year for the next decade.