TREASURIES-US bonds fall as retail sales data backs Fed rate-cut pause

* Retail sales beat forecasts, boost Treasury yields

* Resilient ​US economy ⁠supports Fed holding rates steady -BMO

* Investors eye Warsh Fed chair hearing ​amid Middle East tensions

NEW YORK, April 21 (Reuters) - U.S. Treasuries slid for a second straight session on Tuesday after data showed retail sales increased more than expected in ​March, ‌reinforcing expectations that the Federal Reserve will hold interest rates steady this year.

The war on Iran, however, remains a key focus for the bond market. President Donald Trump ⁠told CNBC in an interview that he did not want to extend the ceasefire ⁠with Iran, adding the U.S. was in a strong ​negotiating position and would end up with what he called a great deal.

Washington has expressed confidence that talks with Iran will go ahead in Pakistan, and a senior Iranian official said Tehran was considering joining.

In late morning trading, the benchmark 10-year yield, which moves inversely to prices, was last up ​3.4 basis points ‌at 4.284%. U.S. 30-year yields drifted higher, up 1.7 bps at 4.898%.

On the shorter end of the curve, U.S. two-year yields, which reflect interest rate expectations, rose 5.3 bps to 3.769% . Treasury yields advanced after data showed that U.S. retail sales jumped 1.7% last month after an upwardly revised 0.7% gain in February. Economists polled by Reuters had forecast retail sales rising 1.4%. The war in Iran boosted gasoline prices and receipts at service stations, while tax ​refunds supported spending elsewhere, the report indicated.

Tom Simons, chief U.S. economist at Jefferies, wrote in a note after the data that he had expected that ‌the headline retail sales number "would be gaudy due to the increase in gas prices and a pickup in unit auto sales," but he was surprised by the strength in other components as well.

"There is ‌no evidence here that higher gasoline prices have motivated the consumer to tighten the belt elsewhere just yet," he noted.

Following the data, U.S. rate futures showed about 10 bps of easing this year, down from 14 bps late on Monday, significantly lower than the more than 50 bps priced ​in before the Iran war, according to LSEG estimates.

The decline in rate cut odds was also reflected in the yield curve, which flattened for a second straight session. ‌The gap between two-year and 10-year yields narrowed to 50.6 bps , compared with 52.5 bps late Monday.

The curve showed a bear flattening move where shorter-dated yields are rising faster than those on longer-term bonds, suggesting that the market does not expect the Fed to cut interest rates anytime soon.

"Overall, this ⁠morning's round of ⁠data was consistent with the perception that the U.S. economy remains resilient and the FOMC (Federal Open ‌Market Committee) is justified in remaining on hold until there is a more durable turn in the realized data," wrote BMO in emailed comments after the report.

The market will now ​turn its attention to Tuesday's hearing on ​Kevin Warsh's nomination as Federal Reserve Chair before the Senate Banking Committee. The hearing threatens to ‌be combative after a key Republican said he would hold up Warsh's confirmation until the White House abandons a criminal investigation linked to current Fed Chair Jerome Powell.

Investors will also be alert for any indication that escalating Middle East tensions and higher oil prices have prompted Warsh to reassess his stance on cutting interest rates. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrew Heavens and Keith Weir)