NEW YORK, Oct 21 (Reuters) - 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 Wednesday.