The mood in bond markets is positive as central bankers around the world appear satisfied with the outcome of the battle against inflation, a development that allows them to proceed with interest rate cuts.

The chairman of the US Federal Reserve Jerome Powell told Congress yesterday that the US is “no longer an overheated economy”, but refrained from giving any indication of how soon a cycle of monetary policy easing might begin.

It is noted that the markets are pricing in a 70% probability that the first reduction in US interest rates will take place in September.

Similar are the expectations for the development of interest rates in the Eurozone.

It is indicative that Italian Central Banker Fabio Panetta said yesterday that the European Central Bank may continue to cut interest rates. As he pointed out, concerns about wage growth, a central driver of inflation, were “not justified”.

It is recalled that eurozone inflation in June fell further to 2.5%, approaching the ECB’s 2% target. However, services inflation, driven mainly by labor costs, remained higher at 4.1%.

In the secondary bond market today, and more specifically in the Electronic Transaction System (HDAT) of the Bank of Greece, transactions of 136 million euros were recorded, of which 85 million euros related to purchase orders.

The yield of the Greek 10-year bond fell to 3.54%, compared to 2.53% of the corresponding German bond, resulting in a spread of 1.01%.