LONDON, Dec 23 (Reuters) - Euro zone government bond

yields rose to their highest level in around a month on Monday

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.

Germany's 10-year bond yield, the benchmark for

the euro zone, rose to 2.327% on Monday, the highest level since

Nov. 22, up around 4 basis points (bps). 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

bank's medium-term 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 headline inflation was at 2.2%, but

services inflation remained at 3.9% and "is not budging much".

Irish central bank chief Gabriel Makhlouf warned that

elements of services inflation in the euro zone were concerning.

Germany's two-year bond yield, which is sensitive

to ECB rate expectations, was last up 3 bps at 2.071%.

Italy's 10-year yield rose 5 bps to 3.50%, after

hitting 3.503%, its highest since Nov. 25. The gap between

Italian and German yields stood at 117 bps.

Investors face an uncertain 2025, with U.S. President-elect

Donald Trump's policies a wild card.

Money market pricing on Monday showed investors expect

around 115 bps of rate cuts from the ECB next year, little

changed from Friday.