(Adds details from auction, remarks) By Herbert Lash NEW YORK, Jan 13 (Reuters) - U.S. Treasury yields slid on Wednesday as the Treasury Department completed its final sale of $120 billion in coupon-bearing supply this week, in which investors showed strong demand for long-dated bonds. An auction of $24 billion in 30-year bonds was well received, the second day in a row that a government debt sale attracted strong bids, which helped drive down yields that had jumped 20 basis points in the past week. Investors earlier shrugged off a report showing an increase in U.S. consumer prices in December amid rising gasoline costs, as underlying inflation remained tame amid the COVID-19 pandemic, which has hit the labor market and services industry. Treasury yields shot higher in the past week through Tuesday on expectations new fiscal stimulus will boost economic growth and Treasury supply after two Georgia runoff elections gave Democrats control of the U.S. Senate as well as the U.S. House of Representatives and the White House. But the jump was overdone and appears the market is now trying to find a trading range, said Justin Lederer, an interest rate strategist at Cantor Fitzgerald "It looks like there"s a line in the sand, at least for now," he said. "It doesn"t mean that we can"t go higher in yield as the year progresses, but it feels like we"ve found at least a saturation point." Yields on the benchmark Treasury note dropped to 1.071%, down from an almost 10-month high of 1.187% on Tuesday. The Labor Department said its consumer price index increased 0.4% after gaining 0.2% in November, with an 8.4% jump in gasoline prices accounted for more than 60% of the CPI rise. In the 12 months through December the CPI advanced 1.4% after increasing 1.2% in November. The CPI report was relatively in line with expectations, although the market"s outlook on inflation is now at its highest level since 2018, said Kevin Flanagan, head of fixed income strategy at WisdomTree Investments Inc. "When you"re looking at the future, though, with respect to the CPI numbers, the year-over-year comparisons are going to begin to weigh in favor of that reflation trade," Flanagan said. Inflation readings last year in March, April and May were very low, which could lead to upside surprises when year-on-year comparisons are taken into account in the months ahead, he said. "It does appear that the stars are in alignment for perhaps a move to the 1.25% and 1.5%," he said. All signs point to rising U.S. inflation though the Federal Reserve won"t pre-emptively react to higher consumer prices by tightening policy, St. Louis Federal Reserve President James Bullard said Wednesday at the Reuters Next conference. The money supply has "exploded," fiscal deficits are "off the charts" and a hot economy may either already be here or "just around the corner," Bullard said. But the Fed needs to regain credibility on inflation after it has underrun the central bank"s 2% target for the last decade, he added in the interview. Investors in the past week have pushed yields higher in anticipation the Fed could begin raising rates as soon as 2023. That would be earlier than previously expected. Yields also fell as Fed speakers pushed back at speculation that they are close to curbing bond purchases or raising rates. The Fed"s current pace of bond buying will likely remain in place "for quite some time" Fed Governor Lael Brainard said on Wednesday. Fed Chair Jerome Powell will speak on Thursday. The yield curve between two-year and 10-year notes pared recent gains to 94 basis points. Thirty-year bond yields slid to a session low of 1.807% from a high of 1.915% on Tuesday, the highest level since March 20. Five-year note yields fell to 0.476%, down from Tuesday when they traded at the highest since March 26. January 13 Wednesday 2:49PM New York / 1949 GMT Price Current Net Yield % Change (bps) Three-month bills 0.085 0.0862 0.000 Six-month bills 0.0925 0.0938 0.003 Two-year note 99-245/256 0.147 0.000 Three-year note 99-178/256 0.227 -0.008 Five-year note 99-128/256 0.4771 -0.027 Seven-year note 98-216/256 0.7961 -0.040 10-year note 98 1.09 -0.048 20-year bond 95-184/256 1.6284 -0.053 30-year bond 95-112/256 1.8239 -0.061 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.00 -0.75 spread U.S. 3-year dollar swap 6.00 -0.75 spread U.S. 5-year dollar swap 7.00 -0.25 spread U.S. 10-year dollar swap 0.75 0.25 spread U.S. 30-year dollar swap -24.75 0.75 spread (Reporting by Herbert Lash; additional reporting by Karen Brettell in New York; editing by Alexander Smith and Jonathan Oatis)