INSTANT VIEW: Consumer confidence falls in June

NEW YORK (Reuters) - U.S. consumer confidence fell in June to its lowest in 16 years as high inflation continued to sap confidence and pushed expectations for the future to a record low, the Conference Board said on Tuesday. KEY POINTS: * The Conference Board, an industry group, said its inflation expectations gauge matched the record-high 7.7 percent it hit in May, which will keep Federal Reserve policy makers concerned over price growth as they meet to decide rates on Tuesday and Wednesday. * The Conference Board said its overall monthly measure of consumers' mood declined to 50.4 this month -- the lowest since 47.3 in February 1992 -- from a revised 58.1 in May. May's reading was originally reported at 57.2. * Economists on Wall Street had been expecting a reading of 56.4, according to a Reuters poll. Their forecasts ranged from 50.0 to 60.0. COMMENTS: ZACH PANDL, ECONOMIST, LEHMAN BROTHERS, NEW YORK:

"This is much worse than expected. This is a slight piece of negative news for the jobs report this month. This poses downside risk on consumer spending once the stimulus from the tax rebate passes.

"The near-inflation expectations here and the University of Michigan survey send a worrying sign, but the Fed will remain focus on long-term inflation measures." MARKET REACTION: * BONDS: U.S. Treasury debt prices extend gains * CURRENCIES: U.S. dollar extends losses * STOCKS: U.S. equity indexes extend falls, Nasdaq and S&P down more than 1 percent * RATE FUTURES: Fed fund futures show 70 percent chance of August rate hike, down from 74 percent before the data EARLIER DATA FROM JUNE 24: U.S. home prices fall further in April-S&P

U.S. chain store sales fell 0.6 pct last week-ICSC