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Itaú Maintain 11.25% Terminal Rate Forecast Post Banxico Minutes

MEXICO
  • Itaú’s terminal policy rate forecast stands at 11.25% amid still high inflation, which would imply a 50-bp and 25-bp rate hikes in February and March.
  • Their call is contingent on the Fed delivering rate hikes of the same magnitude.
  • Itaú note there is a possibility of Banxico slowing down the pace of rate hikes to 25-bp in the next meeting (even if the Fed hikes by 50-bp) and/or that the next hike is the last one of the cycle. In this context, risks for their terminal policy rate forecast are tilted to the downside.

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