Banxico will hold the policy rate steady at 11.25%

The next move is not around the corner but will be a cut. Banxico might start to cut rates in 4Q. We think it should .

Key points

• Key points:
• A more dovish Fed, strongly signaling that it will now move to the sidelines and a stronger peso give Banxico room to start a pause at this meeting
• Over the intermeeting period, headline inflation eased more rapidly than projected by Banxico, while core inflation came down somewhat more than Banxico’s expected path
• A sharper drop in both headline and core inflation is in store, as suggested by trend measures

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