ECB President Hints Rate Cut Cycle Nearing End, Market No Longer Fully Pricing in Another 25BP Cut This Year
Traders have reduced their bets on future rate cuts by the European Central Bank and no longer fully price in a further 25 basis point cut this year. The money market's expectation for further rate cuts before December was once only 23 basis points, compared to 32 basis points before the ECB's rate decision on Thursday. Short-term bonds led the decline, with the yield on two-year German bonds rising by 7 basis points to 1.87% at one point. Previously, ECB President Lagarde stated that the central bank's rate-cutting cycle is nearing its end.
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