📝Don't Expect Banxico June Decision to Be Unanimous: Natixis

We expect Banxico to cut the policy rate by 50bps to 8.00% at

the June 26 meeting given a weak economy, negative output

gap and a strong MXN. However, we believe the decision will not

be unanimous. Board member Jonathan Heath is likely to vote

for either a 25bps cut or a pause, citing recent inflationary

pressures. In the forward guidance paragraph, Banxico will

indicate its intention to reduce the pace of cuts to 25 bps per

meeting. Inflation has re-accelerated and is now above 4.0% for

both headline and core measures. Core inflation, which is more

relevant for monetary policy, has increased due to higher core

goods inflation, while core services inflation has continued to

moderate. We continue to forecast inflation below 4.0% by

December 2025 and below 3.5% by December 2026. Medium-

and long-term inflation expectations remain stable at 3.7% and

3.6% respectively, which is above the target and above the long-

term average of 3.5%. - Natixis