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US government bonds rallied after a better-than-expected jobs report Friday, sending the yield on the benchmark 10-year Treasury note below 1.5% for the first time in about a month.

The yield on the 10-year note recently traded at 1.467%, according to Tradeweb, down from 1.524% at Thursday’s close. The 30-year Treasury yield slipped to a recent 1.896%, down from 1.963%.

Yields, which fall when bond prices rise, slid after data showed employers added a seasonally adjusted 531,000 jobs in October. That beats the 450,000 jobs estimate by economists surveyed by The Wall Street Journal. The U.S. unemployment rate fell to 4.6% in October, also beating economists’ expectations.

The moves extended a volatile week that left investors reassessing the course of inflation and interest rates. After the Federal Reserve announced plans to end its pandemic bond-buying program by June, some stuck to bets that persistent inflation might force Federal Reserve officials to raise interest rates several times in 2022. The yield on the two-year Treasury note, which tends to rise and fall with expectations for rate increases, recently rose above 0.5% to its highest level since March 2020.

The two-year yield then posted its biggest one-session decline since early last year after the Bank of England held interest rates steady on Thursday. The move surprised some traders, who had driven short-term government bond yields higher around the globe after hawkish signals from central banks from Canada to Australia.

Yields on one-year U.K. government bonds nearly halved within hours of the BOE’s announcement, marking their biggest daily move since the 2009 financial crisis.

“The rally we’re seeing in the Treasury market is feeding off what’s going on in Europe," said Donald Ellenberger, senior portfolio manager at Federated Hermes.

At the same time, many have started to pare back their longer-term expectations for the U.S. economy, betting that higher-than-expected inflation and climbing interest rates will cool growth, dragging the 10-year yield—which tends to fall when investors expect slowing long-term growth—down from near yearly highs around 1.7% hit last month.

Some analysts and investors said Friday’s jobs report was an encouraging sign for the economy. Fed Chairman Jerome Powell said earlier in the week that labor-market conditions could improve by the second half of next year to a level consistent with the Fed’s goal of maximum employment, which would justify higher interest rates.

“It’s a dangerous game, because if inflation becomes entrenched before unemployment reaches their target, [the Fed is] going to have to slam on the brakes hard," said Mr. Ellenberger.

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