Jonathan Heath, deputy governor of the Bank of Mexico (Banxico), confirmed that the board is considering resuming interest rate cuts in March, despite inflationary pressures from this year's fiscal adjustments, including IEPS and tariffs. In an interview for the Banorte podcast, the central bank official stated that his February statement points in that direction: "I think the wording in our future guidance was a bit off, but basically what we see is that if inflation is in line with what is anticipated, a new monetary policy easing could happen as early as March," he said. However, he anticipated that, if that is the case, he will again have a dissenting vote, as has happened in recent decisions where the board has supported rate cuts. Analysts, however, still expect other impacts from tariffs that could be seen later, so they maintain the expectation that Banxico will take more time to analyze these shocks. The majority on the board believe that the inflation target will be met. "Something I don't quite understand is how we can present a new trajectory with more inflation and higher growth, but with a recommendation to resume the cut in the policy interest rate." "It's not only below the consensus, but below the most optimistic forecasts," he said. Food prices are not relenting and are forcing Banxico to postpone its inflation target by a year. On the other hand, the official said that a better economic growth this year will be linked to a reduction in trade uncertainty towards the second half of the year, explaining that the stagnation of 2026 was linked to a fall in investment due to uncertainty over Donald Trump's trade policies. Regarding the strength of the Mexican peso, he considered that internal factors have very little weight and it is rather related to the weakness of the dollar, however, he warned that market projections indicate that this good run for the peso is temporary and not permanent. "It seems a bit inconsistent to me," he said. Heath is aware that this new convergence period also does not coincide with market expectations, which do not even see an inflation rate of 3% in ten years.
