Barclays_Global_Portfolio_Manager_s_Digest_Fed_in_Focus

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 34.FOR IMPORTANT EQUITY RESEARCH DISCLOSURES, PLEASE SEE PAGE 34.FOR IMPORTANT FIXED INCOME RESEARCH DISCLOSURES, PLEASE SEE PAGE 35.Global Portfolio Manager's DigestFed in FocusWe provide context and perspective on research acrossregions and asset classes, this week examining the upcomingbenchmark revision from the BLS, the historical equitymarket performance following a restart of rate cuts, and theBoJ's upcoming MPM.• The BLS Benchmark Revision: The BLS estimates that its upcoming benchmark revision willreduce the gain in nonfarm payroll employment over the 12-month period ended in March2025 by 911k. At face value this would reduce the estimated pace of monthly job gains fromApril 2024 to March 2025 by about 76k/m, to 71k/m. That said, we doubt that these estimatesmeaningfully change the FOMC's rate trajectory. The magnitude is also unlikely to come as abig surprise, given that Chair Powell has already highlighted indications of an over-count inprior communications. Assuming the revision stands, the new trajectory of monthly job gainswould be much flatter than the current vintage, which features an abrupt deceleration thisMay. For hawks, this supports the argument that slowing job gains are more a reflection ofgradually adverse labor supply developments than weakening demand. Doves will argue thatpayroll estimates continued to overstate job gains this spring, implying the Fed is even furtherbehind the curve. Neither argument is definitive, in our view.• Rate Cut Restarts & Equity Performance: We identified seven instances of the Fed resumingits rate-cutting cycle after a significant pause over the last five decades. In the instanceswhere the restart of rate cuts wasn't followed by a downturn, equities continued to grindsteadily higher and reached new highs within the next six months