November 28, 2022 19:14 GMT
JPMorgan On Banxico Quarterly Inflation Report, Expectations Survey
- On inflation, last week’s November meeting minutes showed that Banxico remains concerned about unabated core inflation pressures and the increasingly clear unmooring of longer-term inflation expectations.
- As JPMorgan noted last week, they expect these two to be the main topics in this week’s quarterly inflation report (QIR).
- Against this backdrop, the release of Banxico’s economic expectations survey will be important (one day after the QIR is released), as medium-term inflation expectations have been steadily rising, reaching last month a record high above 4% for both headline and core inflation.
- Failure of expectations to plateau could bring about an even more hawkish central bank, and failure to recede back near 3.5% would support the seeming message of the minutes: high rates for long.