Markets Brace as Fed Rate Cut Looms on the Horizon

Euro zone bond yields held steady on Thursday, following a decline the previous day, as investors anticipated further easing from the U.S. Federal Reserve. The expectation stems from statements by Treasury Secretary Scott Bessent, who advocated for a considerable interest rate cut.

During an interview on Bloomberg TV, Bessent indicated a 'good chance' of a 50 basis points reduction in the Fed's rates at its upcoming meeting, prompting investors to fully price in such an outcome for September.

German bond yields showed little movement, with two-year yields remaining flat and the country's benchmark 10-year yield slightly lower. Investors await U.S. economic data and a meeting between President Trump and Russian President Putin, which may influence market dynamics further.

(With inputs from agencies.)