Mexico: Banxico preview - Holding course

Research evidence excerpt

Mexico: Banxico preview - Holding course

J P M O R G A N Latin America Economic Research

30 July 2026

Mexico

Banxico preview - Holding course

• We expect Banxico to keep the policy rate at 6.50% next week EM, Economics Research

• The balance of risks is still consistent with an extended pause Gabriel Lozano

(52-55) 5540-9558

• But with the Fed now expected to hike this year... gabriel.lozano@jpmorgan.com

• … the Board will pay increasing attention to “relative monetary BancoMúltiple,J.P.Morgan,J.P.MorganS.A.,GrupoInstituciónFinancierode Banca

conditions” Santiago Homberg Saury

Next week, we expect Banxico to keep the policy rate unchanged at 6.50%, (52-55) 5540-9499

santiago.hombergsaury@jpmchase.com

extending the pause that followed the end of the easing cycle in May. In our view, J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P.

the current policy stance remains broadly consistent with domestic conditions, as Morgan Grupo Financiero

inflation has continued to converge towards the 3% target and economic slack

lingers despite the welcome 2Q26 GDP print this week. Looking ahead, however,

the discussion is likely to become increasingly centered on the interaction between

a benign domestic backdrop and a potentially less favorable external environment,

particularly if the Fed tightens later this year — this week, our U.S. team front-

loaded its call for a hike to take place in December, instead of 3Q27. The market

continues to price a hike by 3Q26.

Indeed, the Board will have to account for a potentially less favorable relative

monetary backdrop. The sheer threat of tighter conditions in the U.S., even if only

translated into one hike, could exert pressure on interest-rate differentials between

Mexico and the U.S., potentially pressuring the exchange rate and resulting in