(Updates with market activity, analyst comment) By Ross Kerber Nov 8 (Reuters) - Traders sent most U.S. Treasury yields higher on Monday after Congress passed a $1 trillion infrastructure bill and demand was soft for three-year notes at auction. The benchmark 10-year yield was up 3.5 basis points at 1.488%. Analysts said the trading reflected factors including the passage of a long-delayed $1 trillion infrastructure bill in Washington over the weekend and a response to the volatile session on Friday after a strong jobs report that sent the benchmark note as low as 1.436%. "Friday’s drop in yields was a little too much, too quickly, and now the market’s trying to find its equilibrium," said Bryn Mawr Trust analyst Jim Barnes. Stocks were mostly higher on Monday, also influencing debt markets. The U.S. Treasury found soft demand at an auction of $56 billion of 3-year notes at midday, according to Barnes and to BMO rates strategist Ben Jeffery. Auctions of 10-year notes and 30-year bonds will follow on Tuesday and Wednesday. Wednesday is also the scheduled release date for consumer price index data, which will be closely watched as a gauge of inflation. Chicago Federal Reserve Bank President Charles Evans on Monday repeated his view that the current surge in inflation is largely "temporary" and will fade as supply-side pressures get resolved, but he also sounded less convinced by that theory than before. Despite the positive news on jobs and infrastructure, BMO Capital Markets" head of U.S. rates strategy Ian Lyngen said in an interview it was still noteworthy the yield on the 10-year note was below 1.5%, after reaching as high as 1.705% in October. After the three-year auction, the yield on the 10-year touched as high as 1.5037%, then fell back. The pattern reflected the Fed"s shift to hawkish stance and consequent moderating of growth and inflation expectations, Lyngen said. "All the bond-bearish scenarios the market had contemplated have come to fruition," he said. A wrinkle, he said, is breakeven rates remain high, indicating concerns about global growth. The 10-year TIPS yield was at -1.11% and the breakeven inflation rate was at 2.552%, below its peak in October of nearly 2.7%, the highest since 2006. St. Louis Federal Reserve Bank President James Bullard on Monday said he expects the Fed to raise interest rates twice in 2022 after it wraps up its bond-buying taper mid-year, though he said if needed the Fed could end the taper in the first quarter. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 105 basis points, little changed from its close on Friday. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 4.2 basis points at 0.4406%. November 8 Monday 1:43PM New York / 1843 GMT Price Current Net Yield % Change (bps) Three-month bills 0.04 0.0406 -0.005 Six-month bills 0.06 0.0609 -0.007 Two-year note 99-223/256 0.4406 0.042 Three-year note 99-190/256 0.714 0.062 Five-year note 100-20/256 1.1088 0.055 Seven-year note 100-14/256 1.3667 0.052 10-year note 97-216/256 1.488 0.035 20-year bond 97-128/256 1.9023 0.010 30-year bond 102-164/256 1.8836 -0.002 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 20.25 1.00 spread U.S. 3-year dollar swap 20.00 -0.25 spread U.S. 5-year dollar swap 9.00 0.25 spread U.S. 10-year dollar swap 2.50 0.75 spread U.S. 30-year dollar swap -21.00 1.50 spread (Reporting by Ross Kerber in Boston; Editing by Toby Chopra and Cynthia Osterman)