By Karen Brettell NEW YORK, Sept 14(Reuters) - U.S. Treasuries sold off broadly on Friday and 10-year and 30-year debt yields rose to their highest levels since May, after the Federal Reserve's new mortgage bond purchase program spurred investors to sell longer-dated debt. The government bonds weakened as the new stimulus spurred risk-taking in stocks, reducing demand for bonds, and as bond investors feared inflation from the program. Disappointment that Treasuries were not included in the central bank's third round of quantitative easing added to the selloff, traders said. "The Fed is trying to push investors out of comparatively low-risk assets," said Michael Schumacher, head of global rates strategy at UBS in Stamford, Connecticut. Treasuries were hurt as mortgage-backed debt and stocks gained. The Fed said that it will buy $40 billion a month in mortgage-backed debt in an effort to reduce the stubbornly high jobless rate. "I think the back end of the curve was hoping for an extension of Operation Twist, or that there would be something to anchor the long end of the Treasury market a little bit and we didn't get it," said James Newman, head of Treasuries and Agency trading at Keefe, Bruyette and Woods in New York. Operation Twist, which involves buying long-dated debt and funding the purchases with sales of short-dated notes, is scheduled to expire at the end of the year. Thirty-year bonds were the weakest performers, falling 2-30/32 in price to yield 3.09 percent, the highest since May 10. Benchmark 10-year notes dropped 1-11/32 in price to yield 1.88 percent, also the highest since May 10. Despite the selloff, longer-dated debt will continue to be supported by Fed purchases from Operation Twist, and new Treasuries programs are likely still on the table, said UBS' Schumacher. "There may be a little bit of disappointment that they are not doing Treasuries, but the Fed is still taking out virtually all the long-end duration being added by the Treasury for the rest of 2012," Schumacher said. "I would think they will consider doing full-blown QE in Treasuries but not until Operation Twist is done," he added. Treasuries also weakened as bond investors feared the new stimulus would increase inflationary pressures, which would reduce the value of the debt. Inflation expectations as measured by breakeven rates on Treasury Inflation-Protected Securities (TIPS) have risen sharply on the announcement. The breakeven rate on five-year TIPS jumped to 2.31 percent on Friday, up from 2.09 percent on Wednesday, before the Fed statement. Short-dated Treasuries held firm on Friday, after the Fed on Thursday also said it would hold interest rates at zero until at least mid-2015, out from its previous guidance of late-2014. "The front end is anchored by the exceptionally low rates being extended through 2015, you're seeing almost no movement whatsoever in 2s and 3s," said Newman.