(Recasts, updates yields, adds comments from analyst and Chicago Fed president) By Karen Pierog CHICAGO, Jan 4 (Reuters) - U.S. Treasury yields backpedaled from earlier gains on Monday as stock indexes tumbled on nervousness over an election this week that will determine control of the U.S. Senate, while traders pushed inflation expectations over the next 10 years to their highest average since 2018. The benchmark 10-year yield was last up less than a basis point at 0.9165%. "Equities started the year very heavy so that helped push rates a little lower here," said Gennadiy Goldberg, senior rates strategist, at TD Securities in New York. The 10-year Treasury Inflation Protected Securities breakeven inflation rate topped 2% for the first time since November 2018. The move was partly due to "the expectation if there is additional stimulus you"ll probably get additional pressure higher on breakevens since stimulus is reflationary," according to Goldberg. Tuesday"s U.S. Senate runoff elections for two seats from Georgia will determine control of the chamber and the likely fate of President-elect Joe Biden"s legislative agenda. Continued split control of Congress with a win by the Republican candidates would hinder substantial fiscal measures, which would help keep Treasury yields in check, while a Democratic victory could push longer-term yields higher if supply increases to fund more stimulus, according to analysts. Friday"s release of December employment data also looms large as some states limited service-sector activity in the wake of a post-Thanksgiving Holiday surge in coronavirus cases. "It seems like kind of a perfect storm brewing here for a really weak report with a negative headline number," said Tom Simons, money market economist at Jefferies in New York, adding that it should be largely priced into the market. Meanwhile, Chicago Federal Reserve President Charles Evans on Monday told reporters that it will become clearer by springtime if or how the central bank needs to adjust its asset purchase program. "I think it would take a move higher in rates or a deterioration in growth or something like that to actually get the Fed to push out the average maturity of purchases," Goldberg said. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was last down less than a basis point at 0.1171%. A closely-watched part of the yield curve measuring the gap between yields on two- and 10-year Treasury notes was last less than a basis point steeper at 79.96 basis points. January 4 Monday 2:51PM New York / 2051 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0775 0.0786 0.000 Six-month bills 0.085 0.0862 -0.003 Two-year note 100-4/256 0.1171 -0.004 Three-year note 99-228/256 0.1623 -0.003 Five-year note 100-26/256 0.3544 -0.005 Seven-year note 99-232/256 0.6387 -0.003 10-year note 99-156/256 0.9165 0.004 20-year bond 98-192/256 1.4476 0.010 30-year bond 99-68/256 1.6562 0.014 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.00 -0.50 spread U.S. 3-year dollar swap 7.00 -0.50 spread U.S. 5-year dollar swap 6.50 -0.25 spread U.S. 10-year dollar swap 0.00 -0.50 spread U.S. 30-year dollar swap -25.50 -0.75 spread (Reporting by Karen Pierog, Editing by Nick Zieminski and Chizu Nomiyama)