Banco de México cut its overnight interbank rate by 25 bp to 6.50% effective 8 May 2026, citing weaker-than-expected first-quarter GDP, wider economic slack and a continued, though moderating, disinflation process that still faces upward risks. This move extends the easing cycle that has lowered the policy rate by a cumulative 300 bp since February 2025. The corridor or operating framework was unchanged. Headline CPI eased to 4.45 % in April from 4.63 % in mid-March, driven by a decline in core inflation to 4.26 %, yet year-end 2026 inflation expectations inched higher and the balance of risks remains tilted upward; headline inflation is still projected to return to the 3 % target in Q2 2027. Domestic government bond yields fell at the short and medium end but rose at longer tenors, while the peso strengthened. Internationally, global growth picked up in Q1, energy-led rises kept headline inflation elevated in key advanced economies, and the US dollar weakened amid volatile markets and lingering but reduced uncertainty around the Middle Eastern conflict. The Governing Board signalled that, after closing the easing cycle, it now expects to keep the policy rate unchanged for some time, judging the current stance adequate to address prevailing macroeconomic challenges.
Bank of Mexico 2026-05-07
Banco de México cuts policy rate by 25 bp to 6.50 %, effective 8 May 2026
Banco de México cut the overnight interbank rate by 25 bp to 6.50% effective 8 May 2026, extending the cumulative easing to 300 bp since February 2025 amid weaker Q1 GDP, wider slack and a moderating but still risky disinflation path. The corridor was left intact and the Governing Board signalled the cycle is likely over, expecting to keep the policy rate unchanged for an extended period to guard against persistent upside inflation risks.