Banxico's August Meeting Minutes Supports Case For More Rate Cuts

• On August 29, the Banco de México (Banxico) released the minutes from its monetary policy meeting on August 15, during which it decided to cut its benchmark interest rate to from 8.25% to 8.00%.
• Fitch Solutions believes the minutes help pave the way for another rate cut in 2019, potentially as soon as Banxico’s next meeting on September 26. The board members generally agreed that slack in the economy was substantial, with risks to economic activity continuing to point to the downside.
• It is expected that the August inflation print, which will be released on September 9, will show a continued slowdown in headline inflation towards the midpoint of Banxico’s 2.0-4.0% y-o-y target amid low global oil prices.
• Core inflation has been somewhat higher recently and may give pause to policymakers considering additional cuts.

(Source: Fitch Solutions)