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Banxico's Heath Expects Core Inflation To Peak Before The End Of 2022

  • Banxico Deputy Governor, Jonathan Heath, has expressed the view that the central bank is not ready to decouple from the Fed as the problem of inflation has not been resolved.
  • Speaking on a podcast with Grupo Finaniciero Banorte, Heath said rates still need to go higher and that Banxico will consider decoupling when core CPI begins to subside.
  • He expects core inflation to peak in either November or December this year and said that core CPI could be below 4% at the end of 2023 without any further shocks.
  • Heath highlighted that if the central bank were to decouple from the Fed in the short-term, potential pressures on the Peso may develop as well as heightened volatility.
    • Worth noting the Banxico minutes from the November meeting are due tomorrow at 1500GMT/1000ET.

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