Banxico: We expect another 25bp hike and think that the chance of a larger hike is low

Summary

A strong core inflation print and a further rise in 12-months ahead core inflation expectations will keep Banxico in a tightening mode

Key points

• Key points:
• We expect Banxico to revise upwards its headline inflation forecasts for 4Q21 and 1Q22
• We would not be surprised if one of the hawk members of the Board votes for a larger 50bp hike
• Yet, we think that the majority of the Board will not vote for a larger hike

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