Banxico seen cutting rates to 8% despite sticky inflation - Reuters poll

• 21 of 26 economists forecast Banxico will cut rates from 8.50% to 8.00% next week.
• Deputy Governor Heath signals caution, favoring a pause to assess data.
• Majority see easing pace slowing, with rates likely at 7.50% by Q3 2025.

Banco de México (Banxico) is projected to continue its easing cycle next week, despite the latest inflation reports in Mexico suggesting that risks are tilted to the upside. Inflation in May came above the bank's 3% target, increasing concerns that the central bank would continue to reduce rates.

Most economists expect a fourth straight 50 bps cut, though calls grow for a slower pace ahead

On Friday, a Reuters poll revealed that 21 of 26 economists project the central bank would ease rates from 8.50% to 8%. This would be the fourth consecutive 50-basis-point (bps) rate cut.

Out of five economists, three expect a gradual approach by Banxico, while the remaining two expect the Mexican institution to hold rates unchanged.

Last week, Deputy Governor Jonathan Heah told Reuters that he believes 50 bps of easing should be paused until further data can be evaluated.

According to the economists surveyed by Reuters, 15 participants indicated that Banxico could slow the pace of easing at subsequent meetings, with August scheduled next. The majority of the economists polled expect Mexico's main reference interest rate to remain at 7.50% in Q3 2025.