Oct 1 (Reuters) - U.S. equity funds faced large outflows in the week to Sept. 29 on concerns about a rise in U.S. Treasury yields and prospects of persistent inflation levels. U.S. equity funds saw outflows of $6.24 billion, the biggest since the week to Aug. 25, data from Lipper showed.U.S. Federal Reserve policymakers projected last week that they would be ready to raise rates in 2022 and that the bank is likely to begin reducing its monthly bond purchases as soon as November. read more The central bank expected inflation at 4.2% this year, more than double its 2% target rate. Fed chair Jerome Powell this week flagged that inflationary pressure may last longer than anticipated, amid challenges from reopening bottlenecks. read more U.S. large cap equity funds were the hardest hit as selling jumped to a nearly four-month high of $8.6 billion. Investors also sold mid-cap funds of $360 million, but purchased $2.62 billion in small caps. Equity growth funds and value funds both faced outflows of $4.01 billion and $1.85 billion respectively. Among sector funds, health care, industrials and technology each saw net selling of over $400 million, while financials received a net $1.65 billion after net sales for three straight weeks.Meanwhile, U.S. money market funds attracted big investments for a second consecutive week, worth a net $29.8 billion. U.S. bond funds attracted a net $2.9 billion, though purchases fell 50% compared to the previous week. U.S. municipal debt funds saw a drop in inflows as net purchases were just $217 million, 84% lesser than the previous week. However, U.S. general domestic taxable fixed income funds and U.S. short/intermediate investment-grade funds received bigger inflows at $1.76 billion and $1.44 billion. U.S. inflation-protected funds lured inflows for a 10th successive week, worth a net $625 million.