TREASURIES-Long bonds fall as Trump confirms Warsh as next Fed chair

(Updates throughout)

SINGAPORE/LONDON, Jan 30 (Reuters) - Long-dated U.S. Treasury prices fell on Friday after President Donald Trump said he would nominate former Federal Reserve Governor Kevin Warsh to head the U.S. central bank.

Warsh has called for regime change at the Fed, seeking among other things a smaller balance sheet, ?meaning he could push to reduce the amount of bonds the bank owns.

Thirty-year Treasury yields jumped by as much ?as 6 basis points to a session high of 4.914%. They were last trading ?at around 4.88%, 3 bps higher on the day, ?after Trump confirmed Warsh's appointment.

Benchmark ?10-year yields rose 2.4 bps to 4.25%, heading for a 10-bp rise in January, as prices have ?fallen.

Overnight, traders bet heavily that Warsh would ?emerge as the successor to Jerome Powell, whom Trump has attacked for not lowering rates fast enough, and who is scheduled to step down ?as Fed Chair in May.

"Given that several ?names floated ?previously were extremely dovish and closely aligned with the White House's preference for aggressive rate cuts despite the data, Warsh's candidacy represents a relatively hawkish shift ?for the Fed's leadership. It is not necessarily a relief, but it does mark a more disciplined and realistic development," Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said.

Warsh has expressed a preference for shrinking the Fed's balance sheet, something that pushed up longer-dated yields more quickly.

The long end is particularly susceptible to a smaller Fed balance sheet, ?because ?it implies the central bank may be a less reliable backstop in the money markets.

That's where hedge funds borrow to pay for "basis trades" that arbitrage ?small differences between cash and Treasury derivatives and have driven leveraged investment into long-dated paper, Damien Boey, portfolio strategist at Wilson Asset Management in Sydney, said.

"If you now change the assumption of protected money markets because the Fed is no longer on call...then obviously that trade starts to look less appealing and more risky," he said.

Two-year yields were flat at 3.54%. Fed ?funds futures have more or less stuck with pricing for two rate cuts this year, beginning in June or July, after the new Fed chair is slated to take over in May. (Reporting by Tom Westbrook ?in Singapore, Amanda Cooper in London and Avinash P in Bengaluru; Editing by Dhara Ranasinghe)