(Adds seven-year auction results, Afghanistan attacks, updates prices) By Karen Brettell NEW YORK, Aug 26 (Reuters) - U.S. Treasury yields fell from two-week highs on Thursday, a day ahead of a speech by Federal Reserve Chair Jerome Powell, the week"s most anticipated event, which will be scoured for any hints on when the U.S. central bank is likely to begin paring bond purchases. Yields rose earlier in the day after St. Louis Fed President James Bullard said the Fed is "coalescing" around a plan to begin a taper, adding that "we don"t need the asset purchases at this point." He also said he is skeptical that inflation will moderate next year. But Powell may hesitate on Friday to offer any new insight on a timeline for a taper as he waits to see how the spread of Delta variant coronavirus cases affects the economic outlook. “There is some uncertainty with exactly where we are in the economy and how the Fed proceeds with the Delta,” said Lou Brien, a market strategist at DRW Trading in Chicago. Minutes from the Fed"s July meeting released last week showed that the bulk of the bank"s policy-setting committee expect the Fed will start trimming its bond-buying program later this year, though consumer sentiment and economic data have weakened since the July meeting. The Jackson Hole, Wyoming, event is being held virtually due to the spread of coronavirus cases in the region. Benchmark 10-year note yields ended little changed on the day at 1.339%, after reaching 1.375% following Bullard"s comments, the highest since Aug. 12. Five-year note yields, which are more sensitive to intermediate interest rate expectations, also rose, to 0.860%, the highest since July 6, before fading back to 0.840%. Geopolitical concerns also likely increased demand for the safe-haven U.S. debt after at least a dozen U.S. troops were killed and several others wounded in suicide bombings at Kabul airport, in what the Pentagon said was a "complex attack" during its evacuation mission from Afghanistan. Trading was also choppy and liquidity light with many traders and investors out for August summer vacations. The Treasury drew average demand for $62 billion in seven-year notes on Thursday, the final sale of $183 billion in short and intermediate-dated supply this week. The notes sold at a high yield of 1.155%, around half a basis point higher than where they traded before the auction. There was strong demand for a $60 billion auction of two-year notes on Tuesday and solid demand for a $61 billion sale of five-year notes on Wednesday. Data on Thursday showed that U.S. corporate profits surged to a record high in the second quarter, boosted by robust demand and higher prices, suggesting that an anticipated slowdown in economic growth this quarter because of soaring COVID-19 cases could be temporary. A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 353,000 for the week ended Aug. 21. August 26 Thursday 3:11PM New York / 1911 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0525 0.0532 0.002 Six-month bills 0.05 0.0507 0.000 Two-year note 99-197/256 0.2406 -0.004 Three-year note 99-196/256 0.4546 0.003 Five-year note 99-144/256 0.8395 0.006 Seven-year note 99-48/256 1.1222 0.003 10-year note 99-44/256 1.339 -0.005 20-year bond 98-24/256 1.8648 -0.018 30-year bond 101-116/256 1.9359 -0.025 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.50 0.50 spread U.S. 3-year dollar swap 11.25 0.25 spread U.S. 5-year dollar swap 7.75 -1.25 spread U.S. 10-year dollar swap 1.00 0.00 spread U.S. 30-year dollar swap -27.50 0.75 spread (Reporting by Karen Brettell; editing by Jonathan Oatis and Dan Grebler) Our Standards: The Thomson Reuters Trust Principles.