Mexican Central Bank Deputy Governor: Central Bank will consider cutting interest rates by 25/50bp next year

On December 25th, the Mexican Central Bank’s Deputy Governor Heath stated that the Committee may discuss a 25 basis point or 50 basis point rate cut at its next decision in February next year, but he warned that the uncertainty of U.S. trade is increasing. Heath said the final decision will depend on the situation at the meeting. Since the beginning of this year’s easing cycle, the Central Bank has already cut interest rates by 25 basis points. The Central Bank stated last week that with inflation continuing to slow, they are open to further rate cuts. However, Heath warned that the possibility of the U.S. imposing tariffs on goods imported from Mexico has increased uncertainty. He stated that if Trump (in his inauguration speech on January 20th) does not announce significant disruptions and if inflation meets expectations, the discussion before the February decision could range from a 25 to 50 basis point rate cut. But even if the discussion takes place, a larger adjustment is not inevitable.