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Looking ahead, we think the timing of the final rate cut will depend on external conditions. Under our baseline of a short-lived conflict, and with Banxico’s test for second-round effects from this year’s fiscal changes now met, most Board members may prefer to wrap up the easing cycle and deliver a final 25bp cut in May.

This Agenda presents the 2026 dissemination schedule for economic indicators and relevant monetary policy events in Mexico and the US; dates of important events such as the meetings of various relevant international entities such as: World Economic Forum, World Bank and the IMF

We believe it will still have scope to resume gradual rate cuts later this year, as both weak domestic demand and the continued strength of the peso should help contain inflationary pressures going forward.

We expect Banxico to revise up its inflation forecasts. Besides, the forward guidance will likely remain unchanged, thus signaling that March would be too soon to resume the easing cycle.

At this stage, the Board will likely refocus on the risks associated with the persistence of core inflation—particularly in services—and on the temporary inflation shock expected in early 2026, despite the significant weakness of the economy and the strength of the MXN.

We enter a new data-dependent phase in which the Board monitors core inflation before signaling it may lower the ex-ante real policy rate close to the 2.7% midpoint of its estimated neutral range.

The Board noted that “economic activity exhibited sluggishness at the beginning of the third quarter of 2025,” in line with the July’s IGAE print released yesterday, which showed a broad-based 0.9% m/m contraction across all major sectors.