(Updates moves at 1029 GMT, adds analyst comment)

By Linda Pasquini and Samuel Indyk

LONDON, Sept 19 (Reuters) - Euro zone government bond

yields remained steady on Thursday, a day after the Federal

Reserve kicked off its easing cycle with a larger than usual

interest rate cut but signalled policy moves would be measured

through the end of the year.

The Fed lowered its key interest rate by 50 basis points to

the 4.75%-5.00% range, when most analysts saw a quarter-point

cut as the most likely outcome.

But in flagging that they only see another 50 bps of cuts by

the end of 2024, policymakers hinted they might lower rates at a

steady pace.

"I think when it comes to yesterday's meeting, (Fed Chair

Jerome) Powell was pretty good at delivering a balanced

message," which the market reaction clearly reflected, said

Jussi Hiljanen, chief rate strategist at lender SEB.

According to Hiljanen, what came through was that the 50bps

cut was not an emergency measure but rather a way to catch up,

and that the Fed would have lowered its rate by 25 bps at the

previous meeting if all data had been available at that time.

"The market reaction reflected that message," he added.

The size and importance of the U.S. economy means that the

Federal Reserve has an outsized influence on financial markets

and central banks globally.

Germany's 10-year yield, the euro zone's

benchmark, was up 1 bp to 2.205%, a 1-1/2 week high.

The two-year yield, which is more sensitive to

changes in interest rate expectations, was down 0.5 bps at

2.256%.

Italy's 10-year yield was 1 bp lower at 3.564%,

and the gap between Italian and German bund yields

was at 135.5 bps.

When it comes to the ECB, the key thing to follow was

whether there would be any change in rhetoric of governing

council members after the Fed rate cut, with a deviation from

the data-dependant message that they have been adopting for

quite a few months, Hiljanen said.

The ECB cut rates for the second time this year last week

and markets are now trying to guess when the next move is

coming.

While most bets focused on December, markets are pricing a

one-in-three chance of an ECB rate cut next month.