Mexico | Will Banxico signal that the end of the hiking cycle may be in sight?

Summary

Banxico will stick to its resolve to bring inflation down with a 25bp hike but might hint future decisions are more uncertain

Key points

• Key points:
• A more dovish Fed on the back of higher risks to growth amid bank-related risks is a new development that was not present at the time of the last Banxico meeting in February
• After rebounding temporarily in January, inflation resumed its downward trend in February and eased further in the first half of March
• In spite of the core inflation persistence, its seasonally-adjusted trend points to a downward pathway in the coming months that will break the recent stickiness
• We anticipate that Banxico will cut the policy rate by 300 bp during 2024 to a level of 8.50% by the end of next year

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