(Recasts, updates yields, adds analyst comment) By Karen Pierog CHICAGO, Aug 31 (Reuters) - U.S. Treasury yields on the longer end of the curve fell on Monday with investors scurrying back to the market following last week's run-up in yields in the wake of the Federal Reserve's new policy framework announcement. The benchmark 10-year yield was last down 3.1 basis points at 0.6982%. The 30-year yield, which on Friday reached 1.577%, its highest level since mid-June, was last down 4.3 basis points at 1.4648%. "The market was selling off last week in a kind of a bear steepening move just after Jackson Hole, but it seems as though dip buying has started anew," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. At its virtual Jackson Hole economic symposium, the Fed announced it was shifting its strategy to allow higher inflation to offset periods of weak price increases in hopes of letting job markets tighten, wages rise and workers gain more of the benefits from economic expansion. The market will be digging into remarks from several Fed officials scheduled to speak this week for policy details. With a rise in the 30-year yield last week, some investors said the U.S. central bank may need to address the possibility of expanding its purchases of longer-dated debt at its mid-September policy meeting. "That's the sort of incremental detail people are looking to understand and it's certainly within the realm of possibilities," said Bill Merz, head of fixed income research at U.S. Bank Wealth Management in Minneapolis. He added that the market will also focus on Friday's release of August employment data. "The jobs reports are just critical insight into the pace of the recovery," he said. "It has the potential to put incremental pressure on Congress to start taking the next round of fiscal negotiations more seriously." Democrats in Congress and the White House on Friday remained at odds on how much to spend in the next round of stimulus to aid the coronavirus-hit economy. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, which is viewed as an indicator of economic expectations, was last at 56.60 basis points, 2.8 basis points lower than at Friday's close. August 31 Monday 1:28 PM Chicago/ 1828 GMT Price Current Net Yield % Change (bps) Three-month bills 0.105 0.1065 0.002 Six-month bills 0.11 0.1119 0.000 Two-year note 99-253/256 0.1309 -0.004 Three-year note 99-240/256 0.1462 -0.008 Five-year note 99-238/256 0.2642 -0.011 Seven-year note 100-28/256 0.4841 -0.021 10-year note 99-76/256 0.6982 -0.031 20-year bond 98-4/256 1.2375 -0.044 30-year bond 97-212/256 1.4648 -0.043 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.75 0.00 spread U.S. 3-year dollar swap 8.50 0.25 spread U.S. 5-year dollar swap 6.50 0.25 spread U.S. 10-year dollar swap 0.25 0.00 spread U.S. 30-year dollar swap -38.00 0.25 spread (By Karen Pierog; Editing by Steve Orlofsky)
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