Banxico: A more hawkish Fed means a higher peak for the policy rate in Mexico

Summary

There’s a lot of tightening still in the pipeline: Banxico will likely match the (now larger) Fed’s expected rate hikes .

Key points

• Key points:
• Banxico will continue following in the footsteps of the Federal Reserve (Fed) and will lift the policy rate by 75bp, to 9.25%
• We now expect Banxico to take the policy rate to 10.50% by year-end on a more hawkish Fed and stronger core inflation
• … but we continue to anticipate that an easing cycle will start in 3Q23

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