Bank of America maintains its forecast that the Mexican central bank's policy rate will be 6% by the end of 2026

Investing.com - In a report released on Monday, Bank of America maintained its forecast that Mexico’s central bank (Banxico) will cut the policy interest rate to 6.00% by the end of 2026.

The financial institution expects Banxico to implement 25 basis point rate cuts at every other meeting, with the first cut scheduled for March 26. This forecast is consistent with Bank of America’s previous prediction issued on January 7, 2026.

Bank of America noted that although Mexico’s economy performed strongly by the end of 2025, below-potential growth and negative output gaps are key factors supporting a dovish cycle. The bank referenced its report from January 25, emphasizing ongoing growth challenges faced by Mexico.

The forecast also pointed out that, as detailed in Bank of America’s report on February 3, Mexico’s fiscal policy is supporting economic growth in tandem. Additionally, the strong Mexican peso provides the central bank with more room for monetary easing.

While Bank of America has kept its baseline forecast unchanged, it indicated that risks lean toward a slower pace of easing and warned that if inflation accelerates again, Banxico might choose to pause its rate-cut cycle for a longer period.

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