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Free AccessBanorte: Banxico Cuts Will Not Begin Until February 2024
- The tone of Banxico’s statement was very similar to the previous meeting despite the downward revision in the central bank’s inflation path – especially for the headline.
- In Banorte’s view, the most relevant element was that the forward guidance was unchanged. Banorte believe an ‘extended period’ implies two or three decisions with no changes.
- In turn, this would mean: (1) A significant reduction in the probability of a September easing; and that (2) there is a ‘live’ possibility of a first cut either in November or December.
- However, Banorte believe that inflationary conditions – especially core dynamics – and Fed actions being potentially more hawkish will limit the room to manoeuvre for Banxico. Therefore, Banorte reiterate their view that cuts will not begin until February 2024.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.