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JPMorgan Base Scenario is For Easing To Begin In February 2024

MEXICO
  • JPMorgan’s base case scenario is for the start of the easing cycle in February 2024, but recent verbal intervention from one board member suggests the majority is aligning with an earlier cut, possibly as soon as November.
  • The focus should now be on the guidance for the next few months considering the narrative of the board in terms of the need to gradually transition from a “passive” stance, to an “active” easing phase
  • At this point, JPM believe the earliest that Banxico would cut is December, given the slow correction in key core gauges, labor cost pressures, and the risk of two more hikes from the Fed.
  • They currently expect core inflation to end 2023 at 5.4%, with headline at 4.7% and are expecting a unanimous on-hold decision.

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