Archive

December 19, 2025
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Mexico: Closing the Easing Door

  • Banxico cut by 25bp to 7%, broadly in line with expectations, but signalled a de facto pause with a more data‑dependent approach to future easing.
  • Sticky core inflation and upward‑revised forecasts for early 2026 mean additional cuts are unlikely before mid‑2026, keeping real rates above neutral for now.
  • A 4–1 split vote and fiscal/trade‑related upside risks to inflation argue for a prolonged hold in Q1 2026, limiting the scope and speed of the remaining easing cycle.
November 06, 2025
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Mexico: Cautious Easing in Uncertain Times

  • Banxico cut rates by 25bp to 7.25%, in line with the consensus. Guidance turned more cautious, with policymakers less committed to further easing soon.​
  • The 4-1 vote (one dissent for a hold) underscores internal concern about persistent core inflation, which could constrain scope for additional rate cuts.​
  • With GDP contracting and core prices sticky, future rate moves hinge on inflation's path and external risks. The pace of easing will likely slow from here.
August 07, 2025
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Banxico Delivers Expected Cut Amid Rising Risks

  • Banxico cut rates 25bp to 7.75% as expected, with Heath dissenting again, maintaining a gradual easing pace despite core inflation sticking at 4.23%.
  • The inflation outlook is mixed after the headline fell to 3.51% but core forecasts were revised up near-term with target convergence still expected in Q3 2026.
  • Forward guidance stays data-dependent amid trade tensions. Further cuts are likely, but the pace is contingent on inflation progress and economic slack.
June 26, 2025
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Mexico: 50bp Rate Cut To 8% (Consensus 8%) in Jun-25

  • Banxico cut rates by 50 basis points to 8.00% as expected, but Deputy Governor Jonathan Heath's dissent signals growing concern about aggressive easing while inflation remains at 4.51%.
  • The central bank raised year-end inflation forecasts to 3.7% from 3.3% while maintaining that convergence to the 3% target will occur by Q3 2026.
  • Removal of language about future cuts of "similar magnitudes" suggests a shift towards more cautious easing amid trade policy uncertainty and persistent inflation pressures.

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