NEW YORK - Treasury prices moved higher on Friday after the Federal Reserve reinforced views of strong U.S. economic growth in a report to Congress.

The Fed reiterated that it "expects that further gradual increases" in interest rates would be appropriate given "solid" growth. Fed Chairman Jerome Powell will answer questions on the report before lawmakers on Tuesday and Wednesday.

Rising bond prices in Europe helped to support demand for Treasuries in early trading, analysts said. The safe-haven bid appeared to be spurred by U.S. President Donald Trump's criticism of UK Prime Minister Theresa May's Brexit strategy, saying it killed hopes of a U.S. trade deal.

Trump later changed tack, saying a free trade deal was very much on the table.

The yield curve on U.S. Treasuries once again reached its flattest level in 11 years. The spread between 2-year and 10-year Treasury notes fell to 24.27 basis points.

The relatively weak reception for the 3-year Treasury note offering on Tuesday compared with stronger demand for longer-dated debt auctions later in the week showed that "investors were definitely in the long end of the curve," said Justin Lederer, Treasury analyst at Cantor Fitzgerald in New York.

"The yield curve has continued to flatten just relentlessly for the last two weeks even while the long end was locked in a really tight range," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia.

U.S. benchmark 10-year notes have traded narrowly between 2.807 percent and 2.884 percent during the past two weeks.

Treasury prices changed little following the early morning rise. The yield on U.S. 10-year notes was 2 basis points lower at 2.833 percent at 3:34 p.m. EDT (1934 GMT).   

(Reporting by James Thorne; editing by Dan Grebler and Susan Thomas)

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