TREASURIES-Treasury yields briefly extend drop after CPI data

NEW YORK, Dec 18 (Reuters) - U.S. Treasury yields briefly extended losses on Thursday after data showed that consumer prices rose by less than economists had forecast on an annual basis last month.

The headline Consumer Price Index was up 2.7% on the year in November, while core prices rose by 2.6%. Economists polled by Reuters had expected a headline increase of 3.1% and a 3.0% core inflation.

The 2-year note US2YT=RR yield, which typically moves in step with Federal Reserve interest rate expectations, was last down 2.9 basis points on the day at 3.456%.

The yield on benchmark U.S. 10-year notes US10YT=RR fell 2.3 basis points to 4.128%.