MNI Banxico Review– Nov 25: Another 25bp Cut, Guidance Amended

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Executive Summary

• Banxico’s governing board cut the overnight rate by a further 25bp to 7.25%, as expected. The decision was split once again, with Deputy Governor Heath still voting to keep the policy rate on hold.
• While the committee still sees significant downside risks to growth, near-term core inflation forecasts have risen further. Meanwhile, the forward guidance was amended to suggest the possibility of a pause in the easing cycle after a December cut.
• Analysts continue to see the policy rate falling to 6.5% or just below next year, but perhaps with pauses along the way.