sonali: joining us to discuss is mark cabana from bank of america securities and meghan robson from bnp. talking about the changing expectations. the market is still seeing 75 basis points worth of cuts. meghan: at bnp we are expecting fewer than that. we have two rate cuts of 25 basis points for the rest of the year. if we do get weaker employment data -- to us that means something like 135k or less or potentially the unemployment move up, we think that might justify a 50 basis point move. the pce data we got will give some credence. for now our base case is the two 25 cuts. sonali: where is the base case and what is behind changing expectations? mark: our base case is different. we think it will go 50 at the november meeting and another 25 in december. very much in line with what the market is expecting although the market is uncertain about the exact pace over november and december. why the shift? obviously the fed just cut 50. they are normalizing monetary policy. we do not know where they will normalize to. the highest dot is at 3.75%. if that is normal the fed has 100 basis points

around the table now, meghan robson of bnp paribas. good morning.e story may change from september into november, take on more of a political twist be read reading your research on credit, this is heavy on politics. meghan: i review heading into the next six or eight weeks is bearish on credit. investors are under appreciating policy risk. typically when you head into an election, you see volatility rise. given you have a binary outcome with two very different implications, investors tend to de-risk portfolios, reduce positions, and that causes credit spreads to widen. heading into november, we think credit spreads will widen. jonathan: does policy factor into this? meghan: policy certainly factors in. you have two very different candidates. you take an issue like corporate taxes, for example, if you get a sweep in either direction, you could see net income up 7%. on the other hand, can be down 7%. the inability to predict either outcome drive to the de-risking into the event. following that, depending on what outcome we get, we could see dispersion