TREASURIES-Bond prices fall on rise in ISM non-manufacturing

NEW YORK, May 5 (Reuters) - U.S. Treasury debt prices fell on Monday after a stronger-than-expected April services index from The Institute for Supply Management which put the massive non-manufacturing sector back into growth mode.

The Institute for Supply Management's non-manufacturing index came in at 52.0 in April versus 49.6 in March. A reading above 50 indicates growth in the service sector.

Economists had expected a reading of 49.1 for April, according to the median of forecasts in a Reuters poll.

Federal funds rate futures priced in a 10-percent probability that the Federal Reserve will cut the target fed funds rate by 25 basis points at a policy meeting in June, down from a 14 percent chance of a cut prior to the release of the ISM non-manufacturing data.

The benchmark 10-year Treasury note US10YT=RR was trading 7/32 lower in price for a yield of 3.89 percent from 3.86 percent late on Friday, while the 2-year Treasury note US2YT=RR was trading 1/32 lower in price for a yield of 2.48 percent from 2.47 percent. (Reporting by Chris Reese; Editing by Theodore d'Afflisio)