📝We Maintain Banxico Year-End Rate Forecast At 7.0%: Scotiabank

Banxico’s Governing Board cut the benchmark interest rate by 25 basis points to 7.50%, in line with the market consensus, in a split vote.

Headline inflation forecasts were revised downward, while core inflation projections were adjusted upward in the short term again, owing to rising prices in goods and services. Inflation is expected to converge to the 3.0% target by Q3 2026.

Monetary conditions are now very close to the upper bound of the neutral interest rate, despite persistent inflationary pressures, mainly from the core component.

We maintain our year-end target rate forecast at 7.00%, subject to the inflation trajectory and the interest rate differential between Mexico and the United States. - Scotiabank