Banxico delivers third 50bp hike in a row

The hiking cycle has much further to run, the question is whether Banxico will frontload the hikes or take a more gradual pace once core inflation starts to ease

Key points

• Key points:
• Banxico raised the policy rate by 50bp to 6.50%
• Banxico revised up sharply its inflation forecasts once again, bringing them close to our recently updated forecasts
• We expect inflation to remain well above 5.0% through year-end and core inflation to ease below 5.5% until Nov-Dec
• Under this backdrop and with the hawkish shift by the Fed, acknowledged in the statement, the hiking cycle has much further to run

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