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MEXICO: Banorte Say Possibility Of 50bp Moves In 2025 Is High

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • Banorte expect the central bank to cut its reference rate by 25bps to 10.00%. Banorte think the vote will be unanimous –just as in November– with further improvements in inflationary conditions key to support the cut by even the most hawkish members.
  • In Banorte’s view, improving inflationary conditions open the possibility of downward revisions to short-term estimates. For them, this would be very important considering some of the concerns held by the more hawkish members, reflecting that the disinflationary process continues.
  • Banorte believe that several obstacles remain that warrant a more gradual adjustment and a cautious stance, namely the expectations about upcoming Fed actions.
  • Moving into next year, Banorte believe the easing cycle will continue, anticipating a cumulative reduction of 200bps. However, given a more accommodative Board composition after Irene Espinosa’s departure, the possibility of 50bps moves in the first few decisions of the year is high. However, there are counterweights to this scenario, namely Trump’s inauguration on January 20.
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  • Banorte expect the central bank to cut its reference rate by 25bps to 10.00%. Banorte think the vote will be unanimous –just as in November– with further improvements in inflationary conditions key to support the cut by even the most hawkish members.
  • In Banorte’s view, improving inflationary conditions open the possibility of downward revisions to short-term estimates. For them, this would be very important considering some of the concerns held by the more hawkish members, reflecting that the disinflationary process continues.
  • Banorte believe that several obstacles remain that warrant a more gradual adjustment and a cautious stance, namely the expectations about upcoming Fed actions.
  • Moving into next year, Banorte believe the easing cycle will continue, anticipating a cumulative reduction of 200bps. However, given a more accommodative Board composition after Irene Espinosa’s departure, the possibility of 50bps moves in the first few decisions of the year is high. However, there are counterweights to this scenario, namely Trump’s inauguration on January 20.