TREASURIES-Yields hit new lows as Fed stays on hold

* Short-dated yields drop as U.S. rates on hold til 2013

* 2-, 3-, 5-year note yields fall to record lows

* 10-year note yields test record 2008 low

* Investors seek stimulus at Bernanke Jackson Hole speech (Adds details, updates prices)

By Karen Brettell

NEW YORK, Aug 9 (Reuters) - Short-dated U.S. Treasury yields fell to record lows on Tuesday after the Fed said it would keep interest rates near zero for another two years, amid speculation the U.S. central bank would return to the bond market to stimulate the economy.

A little more than a month after the Fed ended its last major Treasury purchase program, known as quantitative easing or "QE2," analysts said the rapidly deteriorating global economy could lead the Fed to signal another initiative later this month.

Yields on shorter-dated U.S. debt plunged after the Fed said it is likely to keep rates low until at least mid-2013, with two-, three- and five-year notes all setting new lows.

"We keep going through yields we haven't been through," said James Newman, head of Treasury and Agency trading at Keefe, Bruyette and Woods in New York.

Much of the speculation is centered on Chairman Ben Bernanke's appearance at the Aug. 26 Jackson Hole conference, where his comments last year were interpreted as signaling the quantitative easing program that just ended.

"It leaves us all eagerly awaiting Bernanke's Jackson Hole speech," said Carl Lantz, interest rate strategist at Credit Suisse in New York.

"One suspects that he'll have to float yet another program, whether its extending duration or just buying more Treasuries like a QE3," he said.

Two-year notes yields traded as low as 0.17 percent, before rising back to around 0.21 percent. Three-year notes yields hit a low of 0.27 percent before backing up to 0.35 percent.

Five-year notes yields fell as low as 0.82 percent before increasing back to 1.00 percent.

U.S. benchmark 10-year Treasury notes also came tested their record low of 2.04 percent, initially set in December 2008, before rising back to around 2.28 percent.

The Treasury rally lost much of its steam after a late day rally sent stocks soaring.

Treasury prices had fallen in early trading as investors ventured back into riskier assets, looking for value after Monday's global selloff in stocks, corporate bonds and industrial commodities.

The debt later got a boost after the Treasury saw strong demand for its $32 billion sale of 3-year notes, the first auction since the U.S. lost its top credit rating by Standard & Poor's.

A larger test will be when the government sells $24 billion in 10-year notes on Wednesday, and $16 billion in 30-year bonds on Thursday.

"Tens and bonds are going to be the tough issues," said Jason Rogan, director of U.S. Treasury trading at Guggenheim Capital Markets in New York. "I think a lot of people were expecting the three-year auction to go well."

Thirty-year bonds were last up 4/32 in price to yield 3.65 percent, after earlier falling as low as 3.46 percent.