Latest news with #JonathanHeath
Bloomberg
6 days ago
- Business
- Bloomberg
Banxico Should Hold Key Rate Due to High Core Prices, Heath Says
The slowdown in Mexico's headline inflation rate in early July is not enough to warrant another interest rate cut next month, according to a top policymaker at the county's central bank, who added that stubbornly high core inflation deserves more scrutiny. Jonathan Heath, a Mexican central bank deputy governor, warned in an interview that the core consumer price reading remained stuck above 4.20% in the first two weeks of July. He stressed that the core rate, which strips out especially volatile energy and food prices, sets the medium-term trend for inflation.
Reuters
21-07-2025
- Business
- Reuters
Mexico's headline inflation seen returning to target in early July
MEXICO CITY, July 21 (Reuters) - Mexico's annual headline inflation likely slowed in the first half of July, though the core index remained under pressure, fueling expectations the central bank will moderate the pace of its interest rate cuts, a Reuters poll showed on Monday. The median forecast from 11 analysts was for a 3.64% annual headline inflation rate, down from 4.13% in the second half of June. The rate would place it within the central bank's target range of 3%, plus or minus one percentage point. (MXCPHI=ECI), opens new tab In contrast, forecasts for core inflation, considered a better measure of price trends because it strips out highly volatile items, indicated an acceleration to 4.30%, its highest level since the middle of last year. (MXCPIC=ECI), opens new tab Compared with the previous two-week period, consumer prices were seen rising 0.27%, while the core index is forecast to have increased 0.20%, according to the poll. (MXCPIF=ECI), opens new tab (MXCPIH=ECI), opens new tab Official data is scheduled for release on Thursday. Last month, Mexico's central bank cut its key interest rate by 50 basis points to 8.0%, although the five-member board's decision was not unanimous, as Deputy Governor Jonathan Heath voted to leave it unchanged. According to the meeting minutes, the four officials who supported the cut, the fourth consecutive cut of that size, said the bank could adopt a more gradual approach in future decisions. The central bank has lowered its benchmark rate by 325 basis points since the start of 2024 as part of an easing cycle after the rate reached a historic high of 11.25%. The next monetary policy decision is scheduled for August 7.
Wall Street Journal
10-07-2025
- Business
- Wall Street Journal
Bank of Mexico Minutes Confirm End to Half-Point Rate Cuts
MEXICO CITY—The Bank of Mexico's cycle of half percentage-point interest-rate cuts came to an end last month as a majority of board members agreed that future reductions should be smaller, minutes of the meeting showed Thursday. The central bank on June 26 lowered its overnight interest-rate target to 8% from 8.5% in its eighth consecutive rate cut and fourth straight half-point reduction. Deputy Gov. Jonathan Heath voted to leave the rate at 8.5%, citing the pickup in inflation and a deterioration of inflation risks.
Reuters
26-06-2025
- Business
- Reuters
Bank of Mexico cuts key interest rate to near three-year low
June 26 (Reuters) - The Bank of Mexico lowered its benchmark rate by 50 basis points on Thursday as largely expected, although the decision by the central bank's five-member governing board was not unanimous. The move brings the rate to 8.0%, the lowest since August 2022. Deputy Governor Jonathan Heath was the sole dissenter, voting to hold the rate at its previous 8.5% level. In prior decisions, he agreed with rate cuts by the board. Markets had largely expected the 50 basis point cut, with 21 of 26 analysts polled by Reuters expecting the decision. The Mexican peso strengthened just over 0.2% against the dollar after the central bank's decision. Heath told Reuters earlier this month he supported a "more cautious, more prudent" approach until inflation resumed a clear downward trajectory. Annual headline inflation in Latin America's No. 2 economy has ticked up in recent months and jumped above the central bank's target range in May. It cooled slightly in the first half of June from the second half of May, hitting 4.51%, but still outside the central bank's target range of 3% plus or minus a percentage point. In its statement on Thursday, the central bank raised its forecast for year-end average headline inflation to 3.7% from its May forecast of 3.3%, although the bank held its estimate that inflation will converge to 3% in the third quarter of 2026. Banxico, as the Bank of Mexico is known, is balancing dual challenges: It is seeking to bring down inflation while also stimulating the economy amid weak economic growth and uncertainty tied to trade tensions and geopolitical developments. The board said in its statement that its decision was "made considering the behavior of the exchange rate, the weakness of economic activity, and the possible impact of changes in trade policies worldwide." "Looking ahead, the Board will assess further adjustments to the reference rate," the statement said. Notably, Thursday's decision did not include language from the most recent three monetary policy decisions about considering future cuts of "similar magnitudes." Private sector analysts polled by Reuters in May projected that Banxico will downsize its rate cuts for the rest of the year. Their median forecast was that the central bank will end 2025 with a benchmark rate of 7.5%.
Reuters
20-06-2025
- Business
- Reuters
Bank of Mexico seen cutting key rate by 50 basis points next week
June 20 (Reuters) - Mexico's central bank is expected to cut its key interest rate by half a percentage point again in its announcement next week, although it would moderate the pace of monetary tightening going forward amid rising inflation and weak economic growth. According to a Reuters poll released on Friday, 21 of 26 economists expect the central bank to cut borrowing costs to 8%, from its current 8.5%, in what would be its fourth consecutive 50 basis point cut. Three participants expect Banxico, as the central bank is known, to take a more gradual approach by reducing interest rates by just 25 basis points, while the remaining two believe it will keep rates unchanged, following the U.S. Federal Reserve's decision this week to hold its benchmark interest rate steady. Banxico has said it is considering lowering the interbank rate again by 50 basis points in its June 26 announcement, extending a monetary readjustment cycle that began in 2024 after it raised its key interest rate to a record high of 11.25% as part of its efforts to tame inflation following the pandemic. But in May, the consumer price index exceeded the bank's official target of 3% interest rate plus or minus one percentage point, raising some doubts about whether the bank will follow through with such a significant rate reduction. Deputy Governor Jonathan Heath told Reuters last week that he believes 50 basis point cuts should be paused until the data can be evaluated further. A further 50 basis point cut would take Banxico's rate to its lowest level in three years, which could provide some relief to the weakening Mexican economy. But the majority of participants polled by Reuters said they believed the central bank should be more cautious in its next moves. Latin America's second-largest economy narrowly avoided a technical recession in the first quarter of the year, but still faces serious risks amid sluggish domestic activity and uncertainty related to U.S. tariff policies. Following next week's decision, Banxico could opt for a 25 basis point cut in its next announcement in August, according to 15 participants, possibly followed by a similar cut in September. A majority of the participants said they believed the third quarter could end with an interest rate at 7.5%.
