(Adds details on Treasury auction, analyst, updates prices) By Davide Barbuscia NEW YORK, Jan 25 (Reuters) - U.S. Treasury yields inched down on Wednesday, reflecting concerns about an economic slowdown ahead of the Federal Reserve's interest rate-setting meeting next week. The Fed raised its benchmark overnight rate by 4.25 percentage points last year to fight decades-high inflation, but the rapid tightening of monetary policy - the fastest since the 1980s - has led investors to weigh inflation concerns against recessionary fears, with markets fluctuating between the two. After a series of supersized rate hikes last year, the U.S. central bank is now largely expected to raise rates by a smaller 25 basis points next week after signs that inflation is cooling off. The prospect of a slower tightening pace has recently reinforced some expectations of a so-called soft landing - a scenario in which inflation eases against a backdrop of weakening but resilient economic growth. But fears of an upcoming economic contraction were affecting markets on Wednesday, with a bleak revenue guidance from Microsoft Corp on Tuesday weighing on sentiment for growth stocks, and with investors focused on corporate earnings reports to assess the impact of the Fed's hikes and gauge whether recent enthusiasm for such stocks will be sustained. "Tech earnings ... clearly painted a picture of a macro slowdown. The January rally might be over if the rest of the big-tech earnings and multi-nationals paints the same downbeat picture," Edward Moya, senior market analyst at OANDA, said in a note. Meanwhile, overseas inflation data and central banks' decisions sent mixed messages. In Australia, inflation rose to a 33-year peak of 7.8% last quarter, signaling global central banks might need to keep hiking interest rates for longer, dampening a recent wave of optimism that aggressive monetary tightening was almost done. The Bank of Canada, on the other hand, signaled it would likely halt further hikes after lifting its key interest rate to 4.5% on Wednesday. "It's kind of a tug-of-war between central banks, which may not eventually be easing the way the markets are pricing, and the weaker growth data," said Eric Theoret, global macro strategist at Manulife Investment Management. Benchmark 10-year government bond yields declined marginally, about one basis point, to 3.458% on Wednesday, and two-year note yields - slid to 4.137%. A widely tracked part of the U.S. Treasury yield curve measuring the gap between those two maturities remained inverted at -68.1 basis points. The inversion of this curve has predicted eight of the last nine recessions, analysts have said. The U.S. Treasury on Wednesday auctioned $43 billion in five-year notes at a high-yield of 3.530%, 2.6 basis points below the expected rate at the bid deadline, a sign of hefty investor demand for the paper. The bid-to-cover ratio was strong at 2.64 times, above last year's average of about 2.4 times. January 25 Wednesday 3:00PM New York / 2000 GMT Price Current Net Yield % Change (bps) Three-month bills 4.5575 4.6747 -0.020 Six-month bills 4.6475 4.8254 -0.032 Two-year note 99-250/256 4.1373 -0.016 Three-year note 100-24/256 3.8409 -0.022 Five-year note 101-106/256 3.5592 -0.023 Seven-year note 102-64/256 3.506 -0.019 10-year note 105-128/256 3.4581 -0.009 20-year bond 103-168/256 3.7367 -0.002 30-year bond 106-220/256 3.6216 0.001 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 29.25 4.50 spread U.S. 3-year dollar swap 14.00 0.00 spread U.S. 5-year dollar swap 4.50 0.75 spread U.S. 10-year dollar swap -3.25 1.25 spread U.S. 30-year dollar swap -39.25 1.50 spread (Reporting by Davide Barbuscia; editing by Jonathan Oatis)