Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- Consensus sees a 50bps hike to 7.00% - inline with prior pace
- Stubborn inflation, a tightening Fed and need to stabilize MXN behind the decision
- Estimate for inflation convergence could slip from Q1 2024
Banxico are expected to raise rates by a further 50bps to a new cycle high of 7.00% at the May meeting, retaining the pace of tightening from the previous three policy meetings. A 50bps move is consensus, despite a further deterioration in the inflation outlook, which is expected to prompt another upward revision to CPI forecasts at this meeting. A sharper than expected upward revision to forecasts could prompt a small number of policymakers to opt for a 75bps hike this month, but they’re expected to be among the minority.
A 50bps rate rise at this meeting would be consistent with the rationale behind the previous three 50bps hikes in this cycle: shoring up domestic financial markets (particularly the MXN), actively heading off rising inflation expectations and keeping an eye on a tightening Federal Reserve, which has accelerated their respective pace of hikes.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.