Benchmark 10-year Treasury yields rose to a 12-week high on Monday as investors continued to adjust to a more robust than previously thought American economy, though there are no major U.S. economic releases this week that are expected to drive market direction. Yields have jumped since a much stronger than expected employment report for September led investors to price out the probability that the Federal Reserve will make additional large interest rate cuts, following a 50 basis point reduction last month.

“Before that employment report, the bond market was thinking more likelihood of recession, more likelihood of aggressive Fed easing,” said Will Compernolle, a macro strategist at FHN Financial in New York.

Traders are now pricing in 43 basis points of cuts by year-end, indicating a less than certain chance that the Fed will make 25 basis point cuts at each of its coming two meetings. Dallas Fed President Lorie Logan said on Monday she sees more rate cuts ahead for the central bank and suggested she sees no reasons why the Fed can’t also press forward with shrinking its balance sheet. Investors are also focused on geopolitical tensions in the Middle East and the Nov. 5 U.S. presidential election, which Compernolle notes “will cause a lot of volatility.”

Benchmark 10-year note yields were last up 6.5 basis points at 4.14% and earlier reached 4.15%, the highest since July 31.

Two-year note yields rose 3.6 basis points to 3.991%.

The yield curve between two-year and 10-year notes steepened to 14.7 basis points.

The Treasury Department will sell $13 billion in 20-year bonds on Wednesday and $24 billion in five-year Treasury Inflation-Protected Securities on Thursday.

(Reporting by Karen Brettell; editing by Jonathan Oatis)