By Dharamraj Dhutia

MUMBAI, June 18 (Reuters) - Indian government bonds could open the session on a declining bias on Thursday after the U.S. Federal Reserve turned hawkish, with the majority of members anticipating the start of an interest rate-hiking cycle before the turn of the calendar.

The yield on the benchmark 6.94% 2036 note IN069436G=CC is likely to move between 6.85% and 6.90%, according to a trader with a private bank. It closed at 6.8626% on Wednesday. Yields move inversely to bond prices.

"Though nothing on rates was expected, the tone of the new governor was particularly very hawkish, which was not anticipated, and which led to a strong reaction in the shorter end of the Treasury yield curve, the trader said.

The Fed held interest rates steady, but policymakers expect a hike in borrowing costs later this year amid growing concerns that inflation will remain sticky above the Fed's 2% target.

New quarterly projections showed that nine Fed officials anticipate a rate hike over the next six months, and an updated policy statement removed language that had signalled the likelihood of further reductions.

The two-year Treasury yield jumped to its highest level in almost four months.

Meanwhile, the benchmark Brent crude contract stayed below $80 per barrel in Asian hours, with markets awaiting more details on the U.S.-Iran peace deal and reopening of the crucial Strait of Hormuz, which Iran has effectively blocked since the war started on February 28. O/R

India imports about 90% of its crude oil requirements, and a sustained fall in prices could ease inflationary pressure and support the rupee, helping the central bank's efforts to raise the dollar.

Foreign investors have injected around $2.2 billion into domestic bonds over the last nine sessions since the RBI announced measures to attract dollar inflows on June 5.

RATES

India's overnight index swap rates may see a reversal of recent declines, especially at the shorter end of the curve, in line with Treasury yields.

The one-year swap rate INR1YMIBROIS=CC ended at 5.88%, while the two-year rate INR2YMIBROIS=CC ended at 6.04%. The five-year rate INR5YMIBROIS=CC settled at 6.2950%.