📝See Banxico Starting Its Easing Cycle In May: Natixis

In our assessment, the likelihood of Banxico initiating cuts in Q1 2024 hinges more on the actions of the Fed. Banxico is unlikely to precede the Fed in cutting rates for various reasons, including avoiding pressure on the MXN, avoiding the perception of being political in an electoral year, and the necessity to await the impact of minimum wage negotiations in the formation of prices. The minimum wage will likely increase between 12% and 20%.

We continue to believe that the conditions for initiating the cutting cycle will align in May, contingent on clarity regarding the Fed’s own cutting cycle, QoQ core inflation consistently hovering around 3.0%, and Q2 GDP growth trending towards negative territory

- Natixis