Goldman Sachs chief credit strategist Lotfi Karoui departs after 18 years - Bloomberg
Investing.com - Mexico’s central bank is expected to reduce its benchmark interest rate by 25 basis points at its upcoming meeting on September 25, according to Bank of America (NYSE:BAC). The anticipated cut would lower the overnight rate to 7.50% from the current 7.75%.
Market pricing aligns with BofA’s forecast, as investors have already factored in a quarter-point reduction for the September meeting. BofA economist Carlos Capistran predicts the Central Bank of Mexico (BANXICO) will proceed with the cut despite core inflation remaining relatively high but stable.
The central bank is likely to justify the rate reduction by pointing to overall economic weakness in Mexico, according to BofA’s analysis. This would mark a continuation of the bank’s monetary easing cycle as it balances inflation concerns with growth considerations.
Some BANXICO board members have expressed opposition to further rate cuts, suggesting potential disagreement during the upcoming deliberations. Nevertheless, the majority appears poised to support monetary easing.
BofA indicates that additional rate cuts could follow later this year if certain conditions persist, including headline inflation remaining below 4%, continued economic weakness, a strong Mexican peso, or further rate cuts by the U.S. Federal Reserve.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.