Markets capitulate to Federal Reserve on interest rates after months-long stand-off

Stay informed with free updates

Simply sign up to the US interest rates myFT Digest — delivered directly to your inbox.

Investors have fallen into line with the Federal Reserve’s expectation that it will cut interest rates just three times this year, ending a months-long stand-off between markets and the central bank.

Following a run of economic data signalling that US inflation is stubbornly high, traders were on Friday pricing in only three…