TREASURIES-Yields fall as inflation largely meets expectations

April 26 (Reuters) - U.S. Treasury yields fell on Friday after data showed that inflation gains in March were in line with economists’ expectations, though on an annual basis they were slightly higher than expected.

The personal consumption expenditures (PCE) price index increased 0.3% last month for an annual gain of 2.7%. Economists polled by Reuters had forecast the PCE price index climbing 0.3% on the month and 2.6% year-on-year.

Core prices also rose 0.3% during the month, as expected, for an annual gain of 2.8%, above economists’ expectations for a 2.7% increase.

Benchmark 10-year Treasury note yields were last down 5 basis points on the day at 4.659% and two-year yields fell 2 basis points to 4.983%.

The inversion in the yield curve between two- and 10-year notes widened two basis points to minus 32 basis points.

(Reporting By Karen Brettell)