Aug 5 (Reuters) - U.S. Treasury yields stumbled on Monday as traders wagered that the Federal Reserve will likely need to be aggressive in cutting interest rates after weak jobs data stoked worries that the U.S. economy could be heading for a recession.

The yield on the benchmark U.S. 10-year Treasury note fell 3.6 basis points to 3.76%, having touched a one-year low of 3.723%. The yields sank nearly 40 basis points last week, the largest weekly fall since March 2020.

Friday's jobs data followed a slew of disappointing quarterly results from major tech firms, setting off a global stocks selloff and driving investors to safe havens.

Michael Farr, president and chief executive officer of Washington-based Farr, Miller & Washington, said the move in the 10-year yield was huge.

"So it certainly looks like there's a fear trade there. That there is a bit of a flight to safety and also an expectation that really seems to lock in a Fed cut in September," he said, in comments after the jobs data on Friday.

Markets are now anticipating 115 bps of cuts this year, with traders pricing in a 75% chance of the Fed lowering rates by 50 bps in September compared with an 11.5% chance a week earlier, according to CME FedWatch tool.

"There’s been a dramatic shift in market narrative last week from concerns about elevated inflation to worries about growth and a potential recession," said Charu Chanana, head of currency strategy at Saxo.

"However, markets have gone a bit too far expecting the Fed rate cuts, and four rate cuts priced in for this year seems a stretch considering that the June dot plot showed only one cut and the structural inflation forces in play."

The closely watched U.S. 2-year-to-10-year yield curve narrowed its inversion, to minus 5.7 bps, the least inverted since July 2022, reflecting both recession fears and expectations for a sharp easing of short-term yields. It was last at minus 7 bps.

The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was 4 bps lower at 3.832%. The yield on the 30-year bond slipped 2.8 bps to 4.083%. (Reporting by Ankur Banerjee in Singapore; Additional reporting by Chibuike Oguh in New York; Editing by Shri Navaratnam and Miral Fahmy)