(Bloomberg) -- Yields on two and 10-year US Treasuries are nearly back to 4%, a level not seen since August after a blowout jobs report forces traders to reassess the outlook for monetary policy.

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Bonds dropped Monday, extending a plunge late last week after surprisingly robust September payrolls undercut chances of another big reduction in interest rates from the Federal Reserve. The two-year yield rose as much as five basis points to 3.98%.

The move reflects swirling doubts over the Fed’s next move, with another bumper, 50 basis-point cut entirely priced out for November’s policy meeting and even a cut half that size no longer fully priced, according to swaps.

“We’ve expected higher yields but anticipated a somewhat gradual adjustment,” Goldman Sachs Group Inc. strategists wrote in a note. “The extent of strength in the September jobs report may have accelerated that process, with renewed debate on the extent of policy restriction, and, in turn, the likely depth of Fed cuts.”

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