By Karen Brettell NEW YORK, Aug 19 - U.S. Treasury yields fell on Thursday as risk appetite washed up for concerns about the spread of COVID variants a day after the Federal Reserve said it expects to begin paring bond purchases this year. I think what we are seeing now is a reaction to concerns about the Delta variant the after effects of the kind of shocking consumer sentiment report that We got this past Friday, said Kevin Flanagan, head of fixed income strategy at WisdomTree. Data on Friday showed that U.S. consumer sentiment dropped to its lowest level in early August in the US as Americans gave faltering outlooks on everything from personal finances to inflation and employment. Yields are also in historically low levels, even as the Fed appears to be on track to reduce bond purchases in the coming months. Minutes from Fed's July meeting show that the bulk of the U.S. Central Bank policy group is coalescing around a plan that would see the Fed start trimming its bond buying program later this year, although policymakers remained somewhat at odds over how fast to taper asset purchases. 'The reaction, or the lack thereof, in the Treasury market is distinctly different from where we were last year, it appears there won't be any kind of taper tantrum, said Flanagan, adding that he still expects yields to rise as the economy continues to recover and inflation likely to hold above the Fed's 2% annual target. Benchmark 10 - year yields dropped three basis points to 1.247%. They fell to 1.127% earlier this month, which was the lowest since February. Investors can watch a future speech of Fed Chairman Jerome Powell in Jackson Hole next week for any indication on when the taper will be announced. Data on Thursday showed that the number of American filing new claims for unemployment benefits fell to a 17-month low last week, pointing to another month of robust job growth, though surging COVID infections pose a risk to the labor market recovery. The US Treasury will sell $8 billion of 10 - year Treasury Inflation-Protected securities on Thursday.