(Recasts with comments from Powell, adds quotes, updates prices) By Karen Brettell NEW YORK, July 14 (Reuters) - U.S. Treasury yields fell after Federal Reserve Chair Jerome Powell on Wednesday maintained his view that strong inflation will be temporary, even after data showed for the second day that price pressures rose more than expected in June. U.S. monetary policy will offer "powerful support" to the economy "until the recovery is complete," and any move to pull back support for the economy, by first slowing the U.S. central bank"s $120 billion in monthly bond purchases, is "still a ways off," Powell said in a hearing before the U.S. House of Representatives Financial Services Committee. Powell addressed concerns that inflation posed new risks of its own, saying the pace of price increases was faster than expected but would be "moderating," language that indicated he saw no need to rush the shift towards post-pandemic policy. “A large percentage of the inflation data is coming from things which Powell has said should be transitory. And although there was anticipation that we were going to get a bump up in inflation, and that this is higher than that bump up, I still think that Powell will wait it out and I think he reinforced that today,” said Lou Brien, a market strategist at DRW Trading in Chicago. Powell’s comments came after data showed that U.S. producer prices accelerated in June, leading to the largest annual increase in more than 10-1/2 years. Data on Tuesday also showed that U.S. consumer prices increased by the most in 13 years in June amid supply constraints and a continued rebound in the costs of travel-related services from pandemic-depressed levels as the economic recovery gathered momentum. Benchmark 10-year yields fell six basis points on Wednesday to 1.356%. The yield curve between two-year and 10-year notes flattened to 112 basis points. Inflation expectations dipped slightly, with breakeven rates on five-year Treasury Inflation-Protected Securities (TIPS) falling to 2.56%, from 2.60% earlier on Wednesday. Long-dated Treasury yields have dropped and the yield curve has flattened as investors take the view that much of the growth boost from business reopenings has already been seen and that any reduction in the Fed’s unprecedented stimulus will result in slower growth. "The long-end is saying…that inflation is going to not persist and overall over the longer run growth will settle back into the trend it was in," Brien said. The Fed is widely expected to indicate that it will reduce bond purchases at its August Jackson Hole economic symposium, though reductions are not expected to begin until year-end or early next year. Powell will testify before lawmakers on Thursday for a second day. July 14 Wednesday 3:00PM New York / 1900 GMT Price Current Net Yield % Change (bps) Three-month bills 0.05 0.0507 0.000 Six-month bills 0.05 0.0507 0.000 Two-year note 99-204/256 0.229 -0.026 Three-year note 99-208/256 0.438 -0.032 Five-year note 100-94/256 0.7993 -0.049 Seven-year note 100-244/256 1.1073 -0.059 10-year note 102-120/256 1.3559 -0.059 20-year bond 105-148/256 1.9107 -0.052 30-year bond 108-172/256 1.9882 -0.049 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.75 0.00 spread U.S. 3-year dollar swap 9.75 0.00 spread U.S. 5-year dollar swap 8.25 0.50 spread U.S. 10-year dollar swap -0.75 0.00 spread U.S. 30-year dollar swap -27.50 0.00 spread (Reporting by Karen Brettell; Editing by Andrea Ricci and Nick Zieminski) Our Standards: The Thomson Reuters Trust Principles.