Every economist Bloomberg polled expects Mexico's central bank to keep borrowing costs unchanged at 6.5% on Thursday. That would make it three meetings in a row on pause, consistent with the idea that officials want firmer proof inflation is settling before they even think about cutting. Bloomberg Economics adds that growth softness argues for easing, but stubborn inflation expectations and rates near neutral lower the urgency to move.
Annual inflation sits inside Banxico's target band of 3% with a 1-point cushion on either side. New data indicate the headline rate reached 3.42% during the first half of September, slightly exceeding forecasts, while the core gauge, excluding volatile food and fuel, came in at 3.79%. Even so, the central bank last month pushed back its timeline for hitting the 3% goal to the final quarter of 2027, after having estimated in June that alignment would come by the second quarter of next year. Citi's Tuesday note sees inflation creeping toward nearly 4% this year, then easing to 3.83% in 2027.
The board, chaired by Governor Victoria Rodríguez, indicated last month they intend to keep the stance steady for now. In August they wrote that "it will be appropriate to maintain the reference rate at its current level," repeating June's guidance when they wrapped up a two-year easing cycle. When assessing risks last month, policymakers cited tensions in the Middle East and the potential for disruptions related to foreign trade policies.
After that, the Federal Reserve implemented its first increase since 2023. A slimmer rate differential with the U.S. can strain the peso and muddy Mexico's inflation path, reducing Banxico's scope to consider cuts. Natixis's Americas chief economist, Benito Berber, expects Mexico to leave the rate untouched "for a long time," even if the Fed adds another quarter-point, unless the peso lurches.
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"We believe Banxico will not be bullied into hiking," he wrote, noting inflation is near target and that 3‑month annualized core inflation is running at 2.5%, below the 3% target. He also thinks the bank may take the unusual step of sidestepping forward guidance to preserve flexibility.
Banxico last month lifted its 2026 GDP forecast to 1.5% from 1.1% after a stronger-than-expected second quarter, while cautioning that risks to the outlook still tilt to the downside. Put that together with a patient central bank, a slightly hotter near-term inflation path, and a Fed that just tightened, and you get a Mexico policy backdrop that stays steady longer. For everyday investors, that can influence pesos and local bond yields more than stocks, so keep an eye on currency swings and how fixed-income returns stack up against inflation.
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