TREASURIES-Most yields slip after Yellen says tax cuts should be repealed

(Adds detail on 20-year bond auction) By Herbert Lash NEW YORK, Jan 19 (Reuters) - Most U.S. Treasury yields fell slightly on Tuesday after U.S. Treasury Secretary nominee Janet Yellen said during Senate confirmation testimony that tax cuts enacted in 2017 for large corporations should be repealed. Yellen, a former Federal Reserve chair, also urged lawmakers to "act big" on the next coronavirus relief package, adding that the benefits outweigh the costs of a higher debt burden. "Though the amount of debt relative to the economy has gone up, the interest burden hasn't," she told the Senate Finance Committee. Yellen said she believed some of the signature 2017 tax reform act should be repealed, such as the cut in corporate tax rates, although rates would not go back to their pre-2017 levels. Benchmark 10-year yields <US10YT-RR> traded just off their session low of 1.090%, falling from earlier slight gains. Jack Ablin, chief investment officer at Cresset Asset Management in Chicago, said he wasn't sure the market reacted to Yellen's testimony as she is a known quantity, and that it had reacted when her nomination was first announced. "I don't think there's any doubt she'll be approved. This is just reaffirming what most investors already perceive," Ablin said. "She's really just representing the (incoming) administration as a cabinet member would." President-elect Joe Biden, who will be sworn into office on Wednesday, outlined a $1.9 trillion stimulus package proposal last week, saying bold investment is needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control. Earlier, breakeven interest rates on U.S. 10-year TIPS , which measure expected annual inflation for the next 10 years, rose to a more than a two-year high of 2.11%, up from 2.089% on Friday. The 5-year TIPS yield traded at its lowest closing yield since April 2013 at -1.714%, down 8.7 bps so far this year from its final close in 2020 of -1.627%, according to Tradeweb. Rates at the long end have been rising on expectations of rising inflation. "Generally people expect inflation to be on the upswing here. You see that in inflation expectations, which are trending higher," said Stan Shipley, macro research analyst at Evercore ISI in New York. Crude oil, many industrial commodity prices, both tradable and non-tradable like plastics, are on the rise, Shipley said. When spending plans by the incoming Biden administration are added, higher rates are likely this year, he said. "There will be a push by the Biden administration to try to get wage gains to accelerate too," he said. Benchmark 10-year yields traded lower at 1.090%, falling from earlier gains. The benchmark rate closed at 1.085% on Friday before the long U.S. weekend, with markets closed for Martin Luther King Jr. Day on Monday. The yield on the 20-year bond inched up about one basis point one day before the Treasury is due to sell $24 billion in the 20-year on Wednesday, followed by $15 billion in 10-year TIPS on Thursday. Rates two weeks ago jumped above 1% for the first time since March and have trended higher since. Yellen told the Senate committee that extended unemployment and food aid will provide the "biggest bang for the buck" in stimulus spending. The core focus will be the needs of workers in cities and rural areas, she said. Yields jumped last week ahead of Biden's announcement of the stimulus blueprint. Federal Reserve officials have talked down market speculation that the U.S. central bank will pull back, or taper, its bond-buying program. The yield curve between two-year and 10-year notes rose slightly to 96.40 basis points. January 19 Tuesday 3:21PM New York / 2021 GMT Price Current Net Yield % Change (bps) Three-month bills 0.08 0.0811 0.000 Six-month bills 0.09 0.0913 0.000 Two-year note 99-253/256 0.131 -0.006 Three-year note 99-198/256 0.2011 -0.008 Five-year note 99-168/256 0.4453 -0.010 Seven-year note 99-4/256 0.7708 -0.009 10-year note 98 1.0903 -0.007 20-year bond 95-128/256 1.6419 -0.010 30-year bond 95-28/256 1.8388 -0.013 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.25 0.50 spread U.S. 3-year dollar swap 6.50 0.50 spread U.S. 5-year dollar swap 7.00 -0.25 spread U.S. 10-year dollar swap -0.25 -0.50 spread U.S. 30-year dollar swap -26.50 -1.00 spread (Reporting by Herbert Lash; additional reporting by Sinead Carew in New York; editing by Marguerita Choy, Mark Heinrich, Richard Pullin and David Gregorio)