* Volumes thin ahead of holiday * Yield on 10-year Treasury note remains near 3 percent * Investors, banks borrow record $103 bln Treasuries from Fed By Luciana Lopez NEW YORK, Dec 30 Benchmark U.S. Treasury debt yields slipped but held near two-year highs on Monday as year-end buying boosted prices, though volumes were light as the New Year's Day holiday approaches. "Today is the day before the last trading day of the year. That's really its claim to fame," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut. "Expectations for significant price action are muted," he added, noting thinly-staffed trading desks. The pull-back reversed some of the advance in yields after the U.S. Federal Reserve this month said it will scale back its monthly purchases of Treasuries and mortgage-backed securities by $10 billion to $75 billion in January as the economy improves. The 10-year Treasury note rose 9/32 in price on Monday to yield 2.974 percent, after the yields rose to 3.002 percent on Friday, the highest since July 2011. The benchmark yield has risen about 125 basis points since the end of last year as the world's biggest economy has regained some momentum. Equities have hit a series of record highs as investors have turned away from safe-haven government debt to scoop up riskier assets. Demand for low-risk debt by banks and investors tidying balance sheets for year-end helped demand for Treasuries. This year-end demand was also felt in the repo market, where the New York Federal Reserve on Monday accepted a record $102.573 billion in cash against Treasuries collateral in its reverse repo facility, which it has been testing since September. The 30-year Treasury note rose 18/32 in price to yield 3.906 percent, down from a yield of 3.945 percent late on Friday. The Fed has suggested short-term interest rates will stay near zero over the near term because of the combination of a still-uncertain job market and benign inflation pressures. Those price pressures could become a major focus in the coming year, said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee. "Assuming economic growth improves next year as forecasted, the story for bond investors will be the track of inflation," Vogel said.