BlackRock rules out a cycle of rate cuts from the Bank of Mexico

“We do not believe that there will be a cycle of rate cuts in the near future at the Bank of Mexico, however, we do believe that there will be adjustments in August,” José Luis Ortega, investment director at BlackRock Mexico, told reporters.

“The Bank of Mexico’s caution and prudence have prevailed, preferring to wait for the post-election noise to subside.”

Banxico’s minutes from its June meeting indicated that a majority of Governing Board members continue to expect headline inflation to converge to the agency’s permanent target of 3% in the fourth quarter of 2025.

The outlook of BlackRock – the world’s largest asset manager – largely coincides with market expectations regarding the path of interest rates in Mexico, which point to two rate cuts of 25 basis points each in the remainder of the year.

Mexico’s overall inflation accelerated in June more than expected, although a continued moderation of the key underlying index – which fell to 4.13% – could open the door to discussions to reduce rates as early as next month, analysts said.