Markets seem convinced that the US Federal Reserve is going to cut interest rates next month. The only questions investors are now debating is to what extent the central bank will trim rates in July — and how low it will ultimately go.

Jan Hatzius, Goldman Sachs chief economist who long defied consensus by predicting the Fed would keep rates on hold, has now pencilled in two cuts for 2019 on the basis of hints from chairman Jerome Powell and his fellow rate-setters.

Meanwhile, the Fed Funds futures market, which allows traders to bet on the direction of US interest