NEW YORK, Aug 19 (Reuters) - U.S. Treasury yields rose on Tuesday after stronger-than-expected housing data but a modest increase in consumer inflation data for July, pushing the levels up from last week's 14 month lows.
"Inflation data is neither here nor there, but the housing data is a little bit more bearish for Treasuries. I think we'll be relatively rangebound," said Thomas Simons, money market economist at Jefferies LLC in New York.
U.S. housing starts rebounded strongly in July, pointing momentum in the economy, but a moderate increase in consumer prices suggested the U.S. Federal Reserve has room to keep interest rates low for a while.
Housing starts surged 15.7 percent last month to a seasonally adjusted annual 1.09 million unit pace, the Commerce Department said on Tuesday, snapping two straight months of declines. Economists had forecast starts to rise to a 969,000-unit rate.
The U.S. Labor Department said its Consumer Price Index edged up 0.1 percent last month as declining energy costs partially offset increases in food and rents.
"I think people are realizing that inflation is, at least for now, stabilized and heading back to a more normal level and not accelerating," said George Goncalves, head of rates strategy in the Americas at Nomura Securities in New York.
Investors await Wednesday's minutes from the July 29-30 Fed meeting, as well as Fed Chair Janet Yellen's speech at the annual gathering of central bankers in Jackson Hole, Wyoming on Friday.
"In the minutes, people will be looking for an exit strategy, but given data we have had, no one is expecting it to come sooner than previously expected. Fed futures are looking to Sept. 2015 and expectations in the market come around that time frame, which is late 2015," Simons said.
Benchmark 10-year U.S. Treasuries traded unchanged on the day with a yield of 2.38 percent. Prior to the data, the 10-year was up roughly a quarter of a point in price. The 30-year bond dropped 5/32 of a point in price, pushing the yield up to 3.2 percent. The long bond had been up as much as half a point in price prior to the data. (Reporting By Daniel Bases; Editing by Nick Zieminski)