(Adds quotes, details on position squaring; updates prices) By Karen Brettell NEW YORK, Feb 12 (Reuters) - Benchmark U.S. Treasury yields rose to their highest levels since March on Friday as investors closed positions ahead of a long U.S. weekend, while inflation expectations edged up to a six-year high. Benchmark 10-year yields rose to 1.203%, just pipping an 11-month high of 1.20% that was set on Monday. Thirty-year yields rose to 2.007%, also inching above Monday"s one-year high of 2.006%. With no new fundamental news to drive market direction, Ben Jeffery, a strategist at BMO Capital Markets in New York, said the moves were “likely position squaring and maybe some profit taking ahead of the long weekend ... there hasn’t really been any new fundamental information.” The bond market will be closed on Monday for Presidents Day. Yields have largely held in a range as investors wait on a new catalyst to send yields substantially higher, with U.S. fiscal spending seen as the next major focus. “Our base case view is for a $1 trillion package, but I think market expectations are gravitating towards something much larger,” said Zachary Griffiths, a macro strategist at Wells Fargo in Charlotte. U.S. President Joe Biden will meet with a bipartisan group of mayors and governors on Friday as he continues to push for approval of a $1.9 trillion coronavirus relief plan to bolster economic growth and help millions of unemployed workers. Data on Friday showed that U.S. consumer sentiment unexpectedly fell in early February amid growing pessimism about the economy among households with annual incomes below $75,000. Investors are expecting that new spending and faster growth as businesses reopen after COVID-19 related shutdowns will also boost inflation. Inflation expectations rose as high as 2.23% on Friday, the highest since 2014. That means that investors are now pricing in average annual inflation of 2.23% for the next 10 years. . The rates had dipped after data on Wednesday showed weaker than expected inflation in January. Demand for inflation-linked and long-dated debt will be tested next week when the Treasury Department sells $27 billion in 20-year bonds on Wednesday and $9 billion in 30-year Treasury Inflation-Protected Securities (TIPS) on Thursday. The closely watched yield curve between two-year and 10-year notes steepened as short-term rates remained contained by expectations that the Federal Reserve will keep rates near zero for years to come. The curve steepened to 109.10 basis points, matching the level reached on Monday, which was widest yield gap since April 2017. Investors are also watching Treasury bills after the Treasury Department earlier this month said it will cut bill issuance to reduce its cash balance. Analysts expect the Federal Reserve to hike the interest it pays on excess reserves (IOER) if Treasury bill rates fall below zero. The one-month and three-month bills currently yield three to four basis points. February 12 Friday 3:01PM New York / 2001 GMT Price Current Net Yield % Change (bps) Three-month bills 0.04 0.0406 0.000 Six-month bills 0.055 0.0558 0.000 Two-year note 100-7/256 0.111 0.000 Three-year note 99-202/256 0.1956 0.008 Five-year note 99-116/256 0.4868 0.026 Seven-year note 99-96/256 0.8427 0.038 10-year note 99-68/256 1.2032 0.045 20-year bond 92-136/256 1.8273 0.064 30-year bond 97-16/256 2.0058 0.061 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.25 0.50 spread U.S. 3-year dollar swap 9.75 0.25 spread U.S. 5-year dollar swap 12.25 0.25 spread U.S. 10-year dollar swap 7.25 0.75 spread U.S. 30-year dollar swap -20.50 0.00 spread (Editing by Sonya Hepinstall)