Banxico: We expect one last 25bp hike at February’s meeting

Banxico lifted the policy rate by 50bp, to 10.50% and strongly hinted that the end of the tightening cycle is in sight .

Key points

• Key points:
• "The board considers it will still be necessary to raise the reference rate in its next monetary policy meeting"
• Today’s strong hint strongly supports our view that Banxico will decouple from the Fed as early as in March
• We continue to expect that with excessively high real rates in a context of a worsening economic outlook and improving inflation outlook, Banxico will start to cut rates before the Fed, in 3Q23

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