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MEXICO: 8.5% Appears Popular End Point for Banxico Easing in 2025

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • Itaú have commented that today’s inflation data supports their view that the disinflationary trend continues, but the fundamentals, such as a weaker currency and a historically low unemployment rate, should limit a more significant deceleration. The current inflation dynamics, a more restrictive Fed, and the uncertainty about US trade policies will be key factors in the board’s upcoming decision.
  • Itaú expect a 25bps rate cut on February 6th to 9.75% and then see five more cuts of 25bps during the year, with the reference rate to reach 8.5% at the end of the cycle.
  • This adds to the earlier note from Banorte, who also see the year-end rate at 8.50%. Previously we noted that the median forecast of around 30 analysts in the latest Citi survey still expects a 25bp cut on Feb 06, while forecasting the 2025 year-end rate at 8.5%.
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  • Itaú have commented that today’s inflation data supports their view that the disinflationary trend continues, but the fundamentals, such as a weaker currency and a historically low unemployment rate, should limit a more significant deceleration. The current inflation dynamics, a more restrictive Fed, and the uncertainty about US trade policies will be key factors in the board’s upcoming decision.
  • Itaú expect a 25bps rate cut on February 6th to 9.75% and then see five more cuts of 25bps during the year, with the reference rate to reach 8.5% at the end of the cycle.
  • This adds to the earlier note from Banorte, who also see the year-end rate at 8.50%. Previously we noted that the median forecast of around 30 analysts in the latest Citi survey still expects a 25bp cut on Feb 06, while forecasting the 2025 year-end rate at 8.5%.