TREASURIES-ECB dollar loan program boosts morale, US debt down

* ECB 3-month dollar liquidity program spurs optimism

* Investors sell safe-haven US debt for riskier assets

* Aug CPI rises more than expected, spurs inflation fear (Adds quotes, ECB context, inflation info, updates prices)

By Emily Flitter

NEW YORK, Sept 15 (Reuters) - U.S. debt prices fell on Thursday as central banks around the globe unveiled three-month dollar loans to European financial firms, while U.S. investors feared the Fed would keep monetary policy loose even as U.S. inflation rose more than expected.

The European Central Bank announced a program to coordinate with the Federal Reserve and the Swiss, British and Japanese central banks to make three-month dollar tenders available to institutions in need of the currency but unable to access traditional funding sources. [ID:nF9E7JT00G]

"This is good for the European banking system, so we're seeing a push higher in equity prices," said Rick Klingman, a Treasury trader at BNP Paribas in New York.

"The ECB-Fed joint announcement is causing a risk-on type trade because they're providing dollar funding through year-end."

Data in the United States showed consumer prices rising more than expected in August, leading some investors to worry inflation would devalue their long bonds even as the Fed kept rates on hold until at least the middle of 2013.

Inflation concerns led to heavy selling in 30-year Treasury bonds, driving their price down more than a point.

"The Fed's kind of stuck between a rock and a hard place," said Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, New Jersey. "Monetary policy is going to probably remain loose, basically increasing the inflationary environment."

Benchmark 10-year Treasury notes US10YT=RR fell 28/32 in price for a yield of 2.09 percent, up from 1.99 percent at Wednesday's close. The 10-year note briefly lost more than a point after the ECB announcement.

The 30-year bond US30YT=RR was last trading 1-9/32 lower in price for a yield of 3.34 percent, up from 3.28 percent late on Wednesday. (Editing by Padraic Cassidy)