Barclays_Global_Portfolio_Manager_s_Digest_Paradigm_Shift

This document is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendations offered in this report.Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companiescovered in its research reports. As a result, investors should be aware that the firm may have aconflict of interest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.* This individual is a member of the Product Management Group and is not a Research AnalystAll research referenced herein has been previously published. You can view the full reports,including analyst certifications and other important disclosures, by clicking the hyperlinks inthis publication or by going to our Research portal on Barclays Live.FOR ANALYST CERTIFICATION(S) PLEASE SEE PAGE 33.FOR IMPORTANT EQUITY RESEARCH DISCLOSURES, PLEASE SEE PAGE 33.FOR IMPORTANT FIXED INCOME RESEARCH DISCLOSURES, PLEASE SEE PAGE 34.Global Portfolio Manager's DigestParadigm ShiftWe provide context and perspective on research acrossregions and asset classes, this week updating our Fed call,now expecting rate cuts in September & December; we alsoexamine US OEMs’ competitive (dis)advantage on the back oftariffs, and analyze Japan’s "synthetic expected inflationrate.”• Fed Call Post Jackson Hole: In his remarks at the Jackson Hole symposium, Chair Powellsent the clearest signal yet that the FOMC is leaning toward a 25bp rate cut at the Septembermeeting. The important signal, in our view, was a shift in Powell's views about the balance ofrisks, emphasizing that a "large margin of slack" is "an outcome we want to avoid" and thatthe slowing in both the supply of, and demand for, workers "suggests that downside risks toemployment are rising." We adjust our rate call accordingly, now expecting two 25bp cuts thisyear, in September and December, followed by two 25bp cuts in 2026, in March and June.That is, we are effectively pulling forward the cut we had timed in September 2026 toSeptember 2025. With core PCE price inflation still projected to be running a few tenths fasterthan the FOMC's 2% target at end-2026, we expect the FOMC to maintain the target range forthe funds rate at 3.25-3.50% in the second half of 2026, slightly above our assessment of thelonger-run neutral policy rate of 3.00-3.25%.• Competitive Landscape for US OEMs: We examined whether US automakers are at acompetitive disadvantage to their foreign competitors in light of tariffs, which we think areless clear cut. US automakers arguably would be at a competitive disadvantage assumingthat foreign automakers were importing their