A still cautious Banxico cuts its policy rate to 7.75%

Summary

There is still plenty of room to cut rates; we expect at least 50bp of additional easing by year-end.

Key points

• Key points:
• Split vote supports our view of a reduction of the policy rate to 7.25% by year-end (vs. 7.50% expected by the consensus)
• A larger 50bp cut will remain on the table for November’s meeting; we think that the size of the cut will ultimately depend on core inflation’s performance

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