Overview
- The minutes show a majority of the Governing Board open to further rate cuts if the recent tax- and tariff-driven price shocks prove transitory.
- The board paused cuts at 7% in February to monitor price dynamics; Banco Base raised the probability of a March 26 cut, while a Citi survey finds most forecasters expect the next move in May.
- Banxico revised its inflation outlook higher and now projects convergence to the 3% target around the second quarter of 2027, noting an upward balance of risks.
- The IEPS and tariff adjustments are described as largely one-off, with a short-lived lift to monthly inflation and fading effects on annual inflation within about a year.
- Subgovernor Jonathan Heath voted against the pause, citing uncertainty over the duration and pass-through of the fiscal measures.