TREASURIES-US Treasury yields little changed as Fed meeting begins

* US Import Price Index rose 1.9% in May versus forecast of 1% rise

* Housing starts fell 15.4% in May, marking biggest decline since March 2024

* Markets will test demand for long-term bonds at 20-year reopening auction

By Tatiana Bautzer

NEW YORK, June 16 (Reuters) - Yields on U.S. Treasuries were mixed on Tuesday following conflicting economic data as investors looked ahead to this week's Federal Reserve policy meeting, the first to be chaired by new U.S. central bank chief Kevin Warsh.

The yield on the benchmark U.S. 10-year Treasury note was down 1.6 basis points at 4.453%. The two-year U.S. Treasury yield, which typically moves in step with short-term interest rate expectations, rose 0.4 basis points to 4.068%. U.S. import prices rose 1.9% in May, above the 1% forecast by economists in a Reuters poll. The index was up 6.7% on a year-over-year basis, the largest rise since August 2022. BMO analysts said in a report on Tuesday that the rise in import prices should add to upward pressure on the Personal Consumption Expenditures Price Index excluding food and energy items in May. There were also signs of some weakness in the U.S. economy, with housing starts plummeting 15.4% in May, the largest decline since March 2024. The Fed is widely expected to leave interest rates unchanged at the end of a two-day meeting on Wednesday, with markets focusing on the language in its policy statement, the release of updated policymaker projections and what Warsh, who took over from former Fed chief Jerome Powell last month, says in his post-meeting press conference. "He'll try to say the least possible and have a much shorter (press) conference than Powell used to have," said Tom di Galoma, managing director of global rates trading at Mischler Financial Group. Markets are also watching developments around the preliminary peace deal reached by the U.S. and Iran. It is still unclear whether the conflict between Israel and the Iran-backed Hezbollah movement in Lebanon will derail the peace effort, di Galoma said. "Although the price of oil continues to slide, we don't know if the conflict will be really over."

Demand for the long end of the Treasury yield curve will be tested on Tuesday with the $13 billion reopening auction of 20-year notes. (Reporting by Tatiana Bautzer; editing by Colin Barr and Paul Simao)