(New throughout) NEW YORK, June 2 (Reuters) - Treasury yields were modestly lower on Wednesday, trading in a tight range as investors held off from making big moves ahead of private payrolls data on Thursday and the monthly federal jobs report on Friday. The 10-year Treasury yield was last down 2.1 basis points to 1.594%. The benchmark yield has been trading within a range of 1.55% to 1.64% for more than a week. The two-year yield, which reflects investor expectations about interest rate hikes, has remained anchored since the Federal Reserve cut rates near zero last year. The two-year was flat at 0.147%. After a much weaker than expected payrolls report in April, Friday’s nonfarm payrolls report for May will offer crucial insight into the stability of the labor market recovery. While economic data has shown signs that reopening is driving growth, the labor market recovery has been less established. The Fed has said that it will keep monetary policy loose until maximum employment has been achieved. Bill O’Donnell, rates strategist at Citigroup, said the small moves in yields during Wednesday’s “low-volume, foot-tapping-for-NFP rates session” were attributable first to a JPMorgan client survey showing that short positions in rates were at their highest since late 2017. Also affecting rates modestly, said O’Donnell, was news that Senate Parliamentarian Elizabeth MacDonough ruled that there would be only one more automatic reconciliation allowed in the 2021 budget negotiations. This could ultimately delay passage of some of President Joe Biden’s economic initiatives. In its Beige Book report published Wednesday, the Fed’s most recent review of economic conditions, officials said U.S. economic recovery accelerated in recent weeks even as a long list of supply chain troubles, hiring difficulties and rising prices cascaded through the country. While growth was at a “somewhat faster rate” from early to late May, homebuilders could not keep up with demand, manufacturers faced delivery delays of the material needed to finish goods, and “it remained difficult for many firms to hire new workers, especially low-wage hourly workers, truck drivers and skilled tradespeople.” The fed funds rate rose on Tuesday to 0.06%, after having fallen to 0.05% on Friday, the lowest since April 30, owing primarily to month-end rebalancing. The fed funds rate is reported the following day at 9 a.m. ET. (Reporting by Kate Duguid; editing by Jonathan Oatis) Our Standards: The Thomson Reuters Trust Principles.