LONDON, Dec 23 Reuters Euro zone bond yields ticked up to their highest level in around a month on Monday before dipping slightly as investors continued to try to gauge the outlook for central bank rate cuts in 2025.

The Federal Reserve last week put upward pressure on U.S. government bond yields, which set the tone for other markets around the world, when policymakers said they now expect to cut rates twice in 2025, down from a previous estimate of four cuts.

Germany39;s 10year bond yield , the benchmark for the euro zone, rose to 2.32 on Monday, around the highest level since Nov. 22. It was last up 1.6 basis points bps at 2.302. Yields move inversely to prices.

Trading volumes were lower due to traders being off over the holiday season, potentially accentuating price moves.

European Central Bank ECB President Christine Lagarde said the euro zone was getting very close to reaching the central bank39;s mediumterm inflation goal, according to an interview published by the Financial Times on Monday.

The ECB cut rates for a fourth time to 3 this month but euro zone bond yields rose after Lagarde struck a slightly tougher tone than expected, saying the fight against inflation was not over.

Lagarde told the FT that although headline inflation was at 2.2, services inflation remained at 3.9 and is not budging much.

Irish central bank chief Gabriel Makhlouf also warned that elements of services inflation in the euro zone were concerning, the paper said.

Germany39;s…