(Updates prices, adds details on upcoming auctions, Clarida comments) By Chuck Mikolajczak NEW YORK, May 12 (Reuters) - U.S. Treasury yields climbed on Wednesday following a much stronger than expected reading on consumer prices that heightened concerns the economy may be heading towards a sustained period of higher inflation. The Labor Department said the consumer price index surged 0.8% in April after rising 0.6% in the prior month. The "core" reading, which excludes the more volatile food and energy portions, jumped 0.9%. Expectations called for overall CPI to rise 0.2% and the core reading to climb 0.3%. The yield on 10-year Treasury notes was up 5.9 basis points to 1.683%. "Obviously the numbers came in hotter than what had been expected but that doesn’t answer the most important question and that simply is whether these inflationary pressures we are seeing, if they are going to be with us longer than just 2021, and that is the piece that is really going to dictate what monetary policy looks like going forward," said Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania. Barnes noted that given how much the CPI number beat expectations, the move in yields was relatively tame. The yield on the 30-year Treasury bond was up 3.9 basis points to 2.391%. The U.S. Federal Reserve has repeatedly stated that it views any inflation to be transitory in nature. On Wednesday, Fed Vice Chair Richard Clarida said it will be "some time" before the U.S. economy is healed enough for the Federal Reserve to consider pulling back its crisis levels of support and he expects the rise in prices to be temporary. The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 2.766%, after closing at 2.697% on Tuesday, near its highest close in just over a decade. The 10-year TIPS breakeven rate was last at 2.577%, indicating the market sees inflation averaging 2.5% a year for the next decade. More supply is scheduled to enter the market later today, with a Treasury auction of $41 billion in 10-year notes scheduled for 1 p.m. EDT (1700 GMT) and $27 billion of 30-year bonds on Thursday. May 12 Wednesday 11:38AM New York / 1538 GMT Price US T BONDS JUN1 155-29/32 -1-1/32 10YR TNotes JUN1 131-244/256 -0-128/2 56 Price Current Net Yield % Change (bps) Three-month bills 0.015 0.0152 0.000 Six-month bills 0.035 0.0355 0.001 Two-year note 99-234/256 0.1688 0.008 Three-year note 99-176/256 0.355 0.025 Five-year note 99-120/256 0.8595 0.058 Seven-year note 99-112/256 1.3348 0.062 10-year note 95 1.6826 0.059 30-year bond 89-16/256 2.3907 0.039 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 10.25 0.75 spread U.S. 3-year dollar swap 11.00 -1.50 spread U.S. 5-year dollar swap 8.25 0.25 spread U.S. 10-year dollar swap -3.00 0.00 spread U.S. 30-year dollar swap -30.00 0.00 spread (Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Andrea Ricci)