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* U.S. consumer confidence index rises to highest since Dec. 2000
* Yield curve flattens, flattest since Nov. 9 (Adds comment, byline, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 28 (Reuters) - U.S. Treasury debt prices slipped on Tuesday in generally below-average volume after data showed a surge in U.S. consumer confidence to a 16-year high.
"This is an impressive gain... and a notable disconnect with 10-year yields under 2.38 percent, but it surely reflects the ongoing bid for equities," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.
Lyngen said the data indicated that next week's U.S. non-farm payrolls report could show more new jobs than expected, "but we'll caution that it's still early in the data cycle."
The consumer confidence data, however, covered the period before President Donald Trump's fellow Republicans withdrew their healthcare plan after promising to abolish former president Barack Obama's 2010 Affordable Care Act.
The healthcare pullback has boosted Treasuries' safe-haven appeal in the last few days as investors worried about the Trump administration's future efforts to boost the economy.
The Conference Board said on Tuesday that the consumer confidence index hit 125.6 in March, surpassing expectations for a reading of 114 and much higher than February levels of 116.1.
"Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects," said Lynn Franco, director of economic indicators at the Conference Board.
In late morning trading, benchmark 10-year notes were down 1/32 in price to yield 2.378 percent, up slightly from 2.375 percent on Monday.
Yields on Monday fell as low as 2.348 percent, their weakest level in a month. They were down from a three-month high of 2.63 percent set on March 14.
U.S. 30-year bond prices were down 3/32, yielding 2.985 percent, marginally higher than 2.98 percent on Monday. Yields on Monday had fallen to 2.96 percent, their lowest since Feb. 28.
U.S. two-year note yields were at 1.273 percent, up slightly from Monday's 1.267 percent.
The yield gap between shorter-dated and longer-dated Treasuries shrank on Tuesday, with the spread between the two-year and 10-year at 110 basis points, its flattest since Nov. 9, a day after the election.
A flat yield curve is often an early warning sign of a looming recession. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Lisa Von Ahn)