Banxico: Policy rate pause expected – Rabobank

Rabobank analysts, Molly Schwartz and Christian Lawrence, anticipate that Banxico will hold the policy rate at 7.00% during the February 5 meeting. This expectation is shared unanimously among Bloomberg surveyed analysts. They also foresee two additional 25bp cuts in 2026, bringing the overnight policy rate to a terminal level of 6.50%.

Anticipation of Banxico's next move

"We expect Banxico to hold the policy rate at 7.00% at the February 5 meeting, which would mark the first pause after 12 consecutive cuts. This view is held unanimously amongst Bloomberg surveyed analysts, including ourselves."

"We foresee at least two more 25bp cuts from Banxico in 2026, to bring the overnight policy rate to a terminal level of 6.50%."

"In the most recent monetary policy statement, the Bank adjusted the language from 'the Board will evaluate reducing the reference rate' to 'the Board will evaluate the timing for additional reference rate adjustments,' potentially hinting at a future pause."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)