Wells Fargo Economics expects Mexico’s June CPI to confirm gradual disinflation, with headline and core inflation easing but services prices still sticky. Banxico is seen maintaining the Overnight Rate at 6.50% through year-end and into 2027, though risks tilt toward cuts if growth disappoints and disinflation broadens further in coming quarters.

CPI path points to extended pause

“Mexico’s June CPI release next week should provide more clarity on whether disinflation is broadening enough to reopen the door to rate cuts. Based on the mid-month data, we expect headline and core inflation to slow to 3.75% year over year and 4.10%, respectively, from 3.94% and 4.19% in May.”

“At its June meeting, Banxico’s Governing Board unanimously held the Overnight Rate at 6.50% and suggested that the current policy setting remains appropriate for an extended period. Policymakers also revised their Q2-2026 headline inflation forecast slightly lower, while the core forecast moved slightly higher.”

“Our base case remains for Banxico to stay on hold through year-end and into 2027. That said, risks are tilted toward a cut rather than a hike. Banxico expects growth to rebound in Q2 after contracting in Q1, then expand at a steady pace. If activity instead continues to struggle and disinflation broadens further, a rate cut could come by year-end.”

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