* U.S. 20-year auction shows weak results

* U.S. 20-year yield hits highest since Dec 1st after auction

* Fed minutes caution against cutting rates too soon

NEW YORK, Feb 21 (Reuters) - U.S. Treasury prices tumbled, pushing yields higher across the board on Wednesday, weighed down by a weaker-than-expected 20-year bond auction and minutes of the last Federal Reserve meeting that expressed concern about cutting interest rates too quickly.

In afternoon trading, the benchmark U.S. 10-year yield rose 4.8 basis points (bps) to 4.322%. U.S. 30-year bond yields were up as well, rising 4.1 bps to 4.491% ,

On the shorter end of the curve, U.S. two-year yields gained 4.1 bps to 4.653%.

Investors showed little appetite for the Treasury's 20-year bond auction, raising concerns about demand for government debt issuance that is needed to meet the country's outsized financing needs. According to the Congressional Budget Office (CBO), the U.S. government is expected to run huge deficits over the next decade of around 5%–7% of gross domestic product (GDP) annually.

The auction's

high yield

stood at 4.595%, higher than market expectation at the bid deadline, suggesting investors demanded a premium to take down the 20-year bond, an issue that is typically hard to move. Going into the sale, there were expectations that investors would comfortably absorb the 20-year bond given the generally well-received auctions of the three- and 10-year notes, and 30-year bonds last week.

The 20-year bond sale's bid-to-cover ratio, a gauge of demand was 2.39, down from last month's 2.53 and the 2.62 average. February's bid-to-cover was the lowest since August 2022.

"I think the hotter-than-expected CPI (consumer price index) and PPI (producer price index) data have quickly shifted investors' understanding of the current balance of risks on inflation," said Vail Hartman, U.S. interest rates strategist, at BMO Capital in New York.

This has created a high level of uncertainty as to where the neutral rate is, he added.

"I don't think January's inflation data has been conducive to an environment where we can see strong bidding conviction from investors. This puts the onus on impending data, specifically inflation for February, because investors would be looking at that to confirm whether or not January was an anomaly."

Post-auction, U.S. 20-year bond yields hit their highest since Dec. 1 at 4.662%, The yield was last up 4.3 bps to 4.609% .

Treasury yields extended gains after the Fed's latest minutes affirmed market expectations that the U.S. central bank will take time to cut interest rates to make sure inflation gets to its 2% inflation target.

Policymakers "generally" agreed that

they needed "greater confidence" in falling inflation

before considering cutting rates, the minutes said in language that seemed to emphasize a careful and perhaps slower approach to rate cuts.

The U.S. rate futures market has priced in a 73% chance of a rate cut at the Fed's June meeting, the first since the COVID-19 pandemic, according to LSEG's rate probability app. That was lower from the 80% seen late on Tuesday. Two weeks ago, rate futures were betting on easing in March.

For 2024, futures traders are pricing in at least three rate cuts of 25 bps each, taking down the fed funds rate to 4.45% by the end of the year. Two weeks ago, traders factored in at least five cuts.

"The FOMC (Federal Open Market Committee) minutes did not tell us anything we did not already know from the January policy statement, Chair (Jerome) Powell's press conference, and subsequent comments from him and other policymakers," wrote Action Economics in a blog after the minutes. "The minutes confirmed that officials judged the policy rate was likely at its peak."

There wasn't much movement in the U.S. yield curve, either. The closely watched spread between 10-year and two-year U.S. Treasury yields steepened slightly to minus 33.2 bps , up from minus 34.1 bps late Tuesday.

An inverted yield curve is a precursor to recession, predicting eight of the last nine economic contractions. This yield curve has been inverted since July 2022. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci)