Wells Fargo notes Banxico left its policy rate unchanged at 7.00% and delivered a more hawkish statement. Inflation forecasts were revised significantly higher and forward guidance signaled less confidence about further easing. The economists continue to expect Banxico to keep rates on hold through 2026, implying a relatively high carry backdrop for the Mexican Peso versus peers.

High carry maintained as Banxico stays put

"In emerging markets, Banxico also held its policy rate steady, and the accompanying statement leaned more hawkish."

"The decision was unanimous, inflation forecasts were revised significantly higher, and forward guidance suggested less confidence about delivering additional cuts ahead."

"We continue to expect Banxico to keep its policy rate unchanged at 7.00% through 2026."

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