Stay informed with the latest insights on Mexico's economy via statistics and AI analysis and synthesis.
Updated: 2026-02-20
Minutes from Banxico indicate that the pause in interest rate cuts is intended to closely monitor inflation trends. Two members of the bank suggested that this pause will be brief, emphasizing the need for vigilance regarding inflationary pressures. — El Economista, 20 Feb 2026. Read more
The article discusses the ongoing decrease in the fundraising rate of Sofipos (Sociedades Financieras Populares) in Mexico. It highlights the challenges these financial institutions face in attracting deposits, which has been a trend over recent months. The decline raises concerns about their operational sustainability and ability to serve their clients effectively. — El Economista, 20 Feb 2026. Read more
Japan may experience significant agitation among investment funds due to various economic pressures. Analysts suggest that the current market conditions could lead to increased volatility, impacting both domestic and international investors. The situation is being closely monitored as it unfolds. — El Economista, 20 Feb 2026. Read more
Mexican stock markets recorded their fourth consecutive day of losses, reflecting ongoing investor concerns. The declines were attributed to various factors impacting market sentiment, although specific reasons were not detailed in the article. Analysts continue to monitor the situation closely as the markets react to economic developments. — El Economista, 20 Feb 2026. Read more
The President of Colombia announced that there will be no changes to the minimum wage for 2026. He emphasized the decision by stating, 'No echamos para atrás,' indicating a firm stance on maintaining the current wage levels despite potential pressures for adjustments. — El Economista, 20 Feb 2026. Read more
The article discusses various strategies for companies to grow despite a stagnant economy. It emphasizes the importance of innovation, customer engagement, and operational efficiency. Key insights include focusing on niche markets and leveraging technology to enhance productivity. The piece also highlights the necessity of adapting to changing consumer behaviors to maintain competitiveness. — Expansión, 18 Feb 2026. Read more
The article discusses the inaccuracies in dollar forecasts, highlighting the challenges faced by analysts in predicting currency movements. It emphasizes the role of various economic indicators and the influence of global events on the dollar's performance. The piece also notes the importance of adapting strategies in response to these unpredictable factors. — El Financiero, 16 Feb 2026. Read more
Bank of Mexico Eyes Short-term Inflation Surge Amid Economic Growth — Google News, 19 Feb 2026. Read more
Bank of Mexico monetary policy meeting minutes: changes in economic policy by the US administration add uncertainty to inflation forecasts — Google News, 19 Feb 2026. Read more
Mexico ICT Grows 5x More than GDP, But Pace Hits Five-Year Low — Google News, 19 Feb 2026. Read more
Canada, Mexico Meet to Boost Trade Amid USMCA Uncertainty — Google News, 19 Feb 2026. Read more
US considering bilateral trade deals with Mexico, Canada: NYT — Google News, 19 Feb 2026. Read more
Should Canada negotiate a new trilateral trade agreement with the U.S. and Mexico or separate deals? — Google News, 19 Feb 2026. Read more
Canada and Mexico committed to trilateral USMCA review, LeBlanc says — Google News, 19 Feb 2026. Read more
Strengthening North American Ties: Canada, Mexico Unite Over Free Trade Agreement — Google News, 18 Feb 2026. Read more
Canada, Mexico want a trilateral agreement under USMCA review, Canadian minister says — Google News, 18 Feb 2026. Read more
Canadian Minister Leblanc: Expresses confidence in collaboration with Mexico's Economy Secretary to achieve a trilateral trade agreement — Google News, 18 Feb 2026. Read more
Updated: 2026-02-07 by Alexander Dentler
Key Takeaways
Following the December 18, 2025 decision, Banxico's policy rate stands at 7.00%, reflecting a recent cut of 0.25 percentage points. After Banxico's December meeting, the target rate has been held steady at 7.00%, following a cumulative reduction of 0.50 percentage points since the last hike in March 2023. The recent cut represents a strategic response to evolving economic conditions, characterized by lingering uncertainties surrounding both domestic and external factors. As Banxico prepares for its next meeting in 47 days, the focus remains on adapting to the shifting landscape of economic pressures and inflationary expectations.
The Fed's target rate currently stands at 3.62%, following a similar cut of 0.25 percentage points in December. Relative to the United States, Banxico's more aggressive rate stance reflects a proactive approach to managing inflation and economic stability amidst heightened global economic uncertainties. The recent coordination in rate cuts illustrates a shared concern over external economic conditions, yet the substantial rate differential signals diverging monetary policy paths. This dynamic places Banxico in a unique position to leverage policy tools more autonomously, especially as it navigates domestic challenges.
The rate differential is likely to influence capital flows and currency stability in the region. For markets, the significant rate differential could enhance Mexico's appeal to investors, potentially supporting capital inflows. Nonetheless, the heightened concerns surrounding rule of law and security suggest that such advantages may be offset by risks that could deter long-term investment. As Banxico maneuvers through these complexities, the interplay between rate policy and economic fundamentals will remain critical.
The central bank's policy rate is the primary tool for steering inflation and economic activity. Banxico targets 3% annual inflation and adjusts its overnight interbank rate to influence borrowing costs throughout the economy. The rate differential with the United States affects capital flows and exchange rate dynamics — a wider spread can attract foreign investment but may constrain domestic credit. Policy decisions are announced roughly every six weeks following scheduled monetary policy meetings.
Updated: 2026-02-20 by María López
Key Takeaways
With updates reflecting evolving economic conditions, our internal expectations indicate a nuanced path for Banxico's policy decisions. As we approach the next decision date on 05 February 2026, the model points toward a substantial chance of no action, with about 58% probability of holding the current rate steady. Meanwhile, the expected move has shifted to a modest reduction of 11 basis points, reflecting a cautious sentiment in the market. The modal bucket remains firmly in the hold range, while a significant 39% probability suggests a smaller rate cut could also be on the table. This nuanced shift highlights the balancing act Banxico faces amid a backdrop of persistent economic uncertainty.
Recent data points have added fresh layers to our understanding of the economic landscape. In particular, updates to inflation figures and economic policy uncertainty have emerged since our last assessment. While inflation has shown signs of easing, the broader context remains complex, as policy uncertainty continues to loom large over the horizon.
Key drivers of Banxico's decision-making are presenting a mixed bag of influences. The latest data suggests moderate dovish pressure stemming from easing inflation, which could support a rate cut. Conversely, elevated economic policy uncertainty has introduced a countervailing force, complicating the committee's outlook. Notably, while inflation trends are becoming economically significant, the influence of credit spreads appears negligible at this juncture. Ultimately, while our model provides insights, the actual decision will hinge on the committee's nuanced judgment in response to these evolving drivers.
Ordered Probit Probabilities
| Rate Change | 04 Feb | 05 Feb 2026 | Δ |
|---|---|---|---|
| -50bp | 11.6% | 3.1% | -8.6 |
| -25bp | 46.7% | 38.9% | -7.8 |
| ±0bp | 41.6% | 58.0% | +16.4 |
| +25bp | 0.0% | 0.0% | +0.0 |
| +50bp | 0.0% | 0.0% | +0.0 |
| +75bp | 0.0% | 0.0% | +0.0 |
| E[Δrate] | -17.5 bp | -11.3 bp | +6.2 bp |
Probabilities in %. Modal bin in bold. E[Δrate] = probability-weighted expected change in basis points.
When markets and the public can anticipate how and why the central bank acts, uncertainty falls and policy becomes more effective. Clear communication helps businesses plan investments, households make borrowing decisions, and international investors gauge currency risks. Economists often stress the importance of clarity and traceability — the ability to follow and understand decisions step by step. Without it, rate moves risk being misread, causing volatility instead of stability. With it, policy signals are more credible, anchoring expectations and strengthening the central bank's influence.
Rate-change probabilities are estimated using an ordered probit model with eight macroeconomic and financial drivers: consumer price inflation (CPI), consumer confidence, the 30-day peso/dollar change, the CETES 28-day spread, stock market growth, the yield curve slope (10Y minus 2Y), Mexico's Economic Policy Uncertainty index, and the Fed-Banxico rate differential. The model maps these drivers into probability bins for the next monetary policy decision, ranging from cuts of 50 basis points or more to hikes of the same magnitude. Coefficients are estimated on the historical record of Banxico decisions and their pre-decision data environment. Probabilities update daily as driver series refresh and should be treated as one input among many.
Updated: 2026-02-20 by María López
Key Takeaways
Bond prices as of 2026-02-20 show the 10Y-3Y spread at 1.49%, reflecting a notable increase of 0.22% from prior observations. The latest yield curve data reveals that the nominal 10Y-3Y spread has shifted upwards, indicating a normal yield curve despite some volatility in recent weeks. Meanwhile, the real spread stands at 0.38%, which, while not alarming, suggests underlying inflation expectations remain muted. The breakeven inflation spread, currently at 1.11%, further underscores that markets are anticipating subdued inflationary pressures ahead, pushing the narrative towards cautious optimism in economic recovery. Given the backdrop of policy uncertainty, these movements signal a complex interplay of investor sentiment and macroeconomic fundamentals.
The curve shape suggests a cautious alignment with anticipated policy shifts, yet a disconnect lingers between market signals and the consensus view from Banxico. Markets appear to be pricing in a 55% probability of a rate cut at the upcoming Banxico meeting, reflecting a desire for immediate economic support through a modest reduction. However, the recent yield curve dynamics highlight that while there is a call for action, the cautious tone from Banxico's minutes indicates a more measured approach may prevail. This divergence between market optimism and the committee's reticence speaks volumes about the prevailing uncertainties that could influence future monetary policy decisions.
Yield Spread Update
| Spread (10Y−3Y) | 18 Feb | 19 Feb 2026 | Δ | NS-DFM |
|---|---|---|---|---|
| Nominal | 1.47 | 1.49 | +0.017 | 1.17 |
| Real | 0.34 | 0.38 | +0.047 | 0.88 |
| Inflation | 1.14 | 1.11 | -0.029 | 0.29 |
All values in percentage points. NS-DFM = Nelson-Siegel Dynamic Factor Model filtered estimate.
When investors and businesses trust that monetary policy will remain credible and predictable, long-term interest rates respond more smoothly to central bank signals. Yield curve spreads between long and short maturities serve as a real-time gauge of this alignment: a stable, upward-sloping curve suggests markets expect gradual normalization, while persistent inversions often signal that markets anticipate policy shifts before they are announced. For Mexico, where inflation targeting depends on anchoring expectations across a diverse investor base, the 10-year minus 3-year spread offers a compact summary of whether policy communication is landing as intended.
Yield curve spreads are filtered using a Nelson-Siegel Dynamic Factor Model (NS-DFM) estimated on weekly data. The model ingests 16 synthetic yield curve points — 11 nominal maturities (overnight through 30 years) and 5 real maturities (overnight through 30 years) — fitted via Nelder-Mead optimization on Banxico bond prices. Factor loadings follow the Diebold-Li (2006) Nelson-Siegel parameterization, decomposing each yield curve into level, slope, and curvature components for both real rates and implied inflation. The Kalman smoother extracts filtered spread estimates that track the underlying signal in daily bond market noise.
So…what is this—and why am I doing it?
This project began with a simple question in 2021: how much of the work of producing useful economic information can we hand over to machines? Monitoring Monetary Policy in Mexico is a thought experiment at that frontier. By combining statistical analysis, tailored visualizations, and large language models, it demonstrates how even highly specialized topics—such as Mexican monetary policy—can be made more accessible, relevant, and insightful. Meanwhile, the system is designed to run without human intervention on a daily basis. My role is to set the design; the automation carries it out.
When does data stop being a dump and start being a story?
The initiative builds on my earlier Monitoring Mexico project but has since evolved in important ways. Data is no longer simply displayed; it is analyzed, distilled, forecasted, visualized, interpreted, narrated, and contextualized. Large language models help transform both raw and modeled data into context, turning numbers into stories. In short, raw information is transformed into understanding.
Who’s in charge here—a Raspberry Pi or common sense?
Behind the scenes, the site runs on a Raspberry Pi 5 powered by Python and a library of custom routines. Automation drives much of the process, but human expertise remains essential in designing the explanation and presenting the material. The balance between machine efficiency and human judgment is what makes the project work.
How do we cut through the jargon and keep the signal?
The aim is straightforward: to bring clarity to an area often obscured by technical detail. Monetary policy shapes households, firms, and markets, yet its analysis usually remains confined to experts. By filtering, explaining, and visualizing the data, this project seeks to make that knowledge more transparent and more useful.
Is this the 80/20 rule you learn in business school in the wild?
At its core, the site is both a contribution to public understanding and an exploration of how informational value is created. It is a humble attempt to deliver 80% of the insights of a central bank analysis with 20% of the resources—while also testing what the future of knowledge generation might look like.
What might be new the next time you drop by?
This is very much a work in progress, with new features, analyses, and visualizations added over time. We can now at the brink of generating our very own economic policy uncertainty (EPU) index, and we consider a newsletter. But maybe a chatbot might be more appropriate? Coming back to check for updates is always a good idea. If the site sparks curiosity, fosters dialogue, or simply helps illuminate Mexico’s economic dynamics, it has achieved its goal.
Updated: 2026-02-20 by María López
Key Takeaways
The early-January 2026 CPI release shows headline inflation at 3.83%, resting comfortably within Banxico's 2%-4% target band. The early-January 2026 CPI release shows headline inflation at 3.83%, resting comfortably within Banxico's 2%-4% target band. This marks a slight uptick of 0.07 from the previous report, indicating a modest resurgence in consumer prices. However, this upward movement isn't alarming, especially given the backdrop of easing headline inflation pressures globally. The current rate situates headline inflation around the 40th percentile historically, suggesting a moderate but not unmanageable inflationary landscape.
Core inflation, which excludes volatile food and energy prices, stands at 4.58%, indicating a concerning divergence from the headline figure. Core inflation, which excludes volatile food and energy prices, stands at 4.58%, indicating a concerning divergence from the headline figure. This core rate has increased by 0.07 since the last report, intensifying the pressure on Banxico as it remains well above the 3% target. As core inflation continues to rise, it raises questions about underlying price stability and the effectiveness of previous policy measures aimed at controlling inflation. The persistent elevation of core inflation points to deeper structural issues that could warrant a more nuanced approach from the central bank.
Trade prices show a complex picture, with export prices soaring while import prices are more subdued. Trade prices show a complex picture, with export prices soaring while import prices are more subdued. Export prices surged to 7.05%, reflecting robust demand dynamics, while import prices increased only slightly to 2.30%. This divergence suggests that while Mexico’s export sector may be benefiting from global recovery, domestic consumption and purchasing power remain under strain, potentially complicating Banxico's policy decisions as they navigate through these turbulent waters.
| Series | Current | Prev. Forecast | Error | 12M Forecast | Prev. 12M | Revision |
|---|---|---|---|---|---|---|
| Headline CPI | 3.8 | — | — | 4.3 | 4.3 | +0.00 |
| Core CPI | 4.6 | — | — | 4.0 | 4.0 | +0.00 |
| Export Price Index | — | — | — | 3.8 | 3.8 | +0.00 |
| Import Price Index | — | — | — | 3.0 | 3.0 | +0.00 |
All values in percentage points (YoY, seasonally adjusted). "Error" = actual minus previous forecast. "Revision" = change in 12-month outlook since last update. "—" = no prior forecast available.
The Consumer Price Index (CPI) measures changes in the cost of a representative basket of goods and services purchased by Mexican households. Banxico targets 3% annual inflation with a tolerance band of 2%-4%. Core CPI — which excludes volatile food and energy prices — reveals underlying inflation trends that guide monetary policy. Import and export price indices extend the picture by linking Mexico's inflation dynamics to global markets, trade flows, and currency movements.
Headline CPI, core CPI, export prices, and import prices are projected six months ahead using a Vector Autoregression (VAR). The four series are estimated jointly, so each informs the others' forecasts through lagged interactions. Projections update each time new CPI data arrive and may shift materially after revisions.
Updated: 2026-02-06 by Jorge Martínez
Key Takeaways
The latest SHF House Price Index for Q3 2025 reveals a YoY inflation rate of 8.86%, which is about as spicy as a taco on a hot summer day. This inflation rate, reported on July 1, 2025, is comfortably above the historical average, strutting in at the 79th percentile since 2006. In the same breath, house price inflation is outpacing both the headline CPI at 3.69% and the housing CPI at 3.35%, creating a premium of over 5 percentage points in each case. Meanwhile, the DFM nowcast suggests a slight divergence from this observed rate, but let's not throw a piñata just yet; we’ll dig into that shortly.
Now, let’s unravel the mystery of the DFM nowcast, which brings some intriguing twists to our house price saga. The DFM nowcast, standing at 7.29% as of January 1, 2026, is lower than the observed 8.86%, indicating that the model detects downward pressure from auxiliary indicators like mortgage lending and CPI housing. This suggests that while house prices have been on a rollercoaster of inflation, the underlying trend is showing signs of mean reversion or cooling off, which could have implications for those still clinging to the idea of a housing bonanza. In short, the DFM is waving a caution flag, reminding us that even the hottest markets can cool down faster than a soggy tortilla.
Housing is a major household asset and a key store of wealth. Rising prices can lift balance sheets and collateral values, while falling prices can weaken credit conditions and confidence. Housing costs also shape the cost of living and affordability, making house price inflation relevant for both growth and distributional pressures in Mexico.
Updated: 2026-01-23
Key Takeaways
Brent oil prices through December 2025 reveal a disconcerting tale, settling at $61.81, a staggering 15.6% decline year-over-year. Brent oil prices through December 2025 reveal a disconcerting tale, settling at $61.81, a staggering 15.6% decline year-over-year. This downward trajectory, exacerbated by global supply chain disruptions and fluctuating demand, has cast a pall over Mexico's federal revenues, which hinge significantly on oil exports. With a three-day streak of decline, the implications for Pemex and the Campeche regional economy are as clear as a foggy morning: uncertainty looms large.
Copper, on the other hand, shines like a beacon, currently priced at $11,790.96 and boasting a robust 32.3% increase over the past year. Copper, on the other hand, shines like a beacon, currently priced at $11,790.96 and boasting a robust 32.3% increase over the past year. This metal's recent upward momentum—evident in a 9.1% monthly increase—reflects a burgeoning demand from the tech sector and a resurgence in global infrastructure projects. For Mexico's mining sector, particularly in Sonora, this trend offers a silver lining amidst the otherwise turbulent commodity seas.
Corn prices are on a modest ascent, currently at $205.32, with a year-over-year rise of 1.2%. Corn prices are on a modest ascent, currently at $205.32, with a year-over-year rise of 1.2%. This gentle rise, marked by a 1.8% increase in the last month, paints a picture of stability in an otherwise volatile agricultural landscape. For Mexico's 1.5 million smallholder farmers, this incremental growth brings hope, but the specter of food price inflation still lurks in the shadows.
Commodity prices feed directly into Mexico's inflation pulse and terms of trade. Oil and corn affect energy and food costs, while copper is a proxy for global industrial demand. For policymakers, sharp commodity swings can shift inflation expectations and fiscal balances, making these prices critical to monitor.
Updated: 2026-02-17 by Jorge Martínez
Key Takeaways
The January 2026 IMSS release shows unit labor costs at 3.12%, indicating wages are outpacing productivity. Following January's formal sector wage data, ULC in manufacturing is rising, with a MoM decrease of 0.32 percentage points. This uptick signifies that wages are growing faster than productivity, which could stir the pot for cost-push inflation pressures down the line. At the 72nd percentile, this trend raises eyebrows about competitiveness and cost management in the sector.
Real wages in the formal sector are showing signs of improvement, with manufacturing workers enjoying a robust increase in purchasing power. With real wage growth at 5.61%, households in manufacturing are experiencing tangible benefits, as their purchasing power is on the rise. This positive shift, marked by a 1.54% MoM increase, suggests that workers are gaining ground against the rising costs of living, providing a much-needed cushion in uncertain economic times.
Across sectors, manufacturing is pulling ahead of retail when it comes to real wage dynamics. Manufacturing is outperforming retail, with real wages rising significantly while retail workers are facing a decline in purchasing power, currently at just 1.52%. This divergence highlights a troubling trend in the retail sector, where real wages have been stagnant, potentially leading to increased financial strain for households reliant on this sector.
Unit labor costs (ULC) measure the average cost of labor per unit of output — when wages grow faster than productivity, ULC rises, potentially squeezing profit margins and fueling inflation. In Mexico, where the formal sector employs roughly half the workforce, IMSS-registered wage data captures trends in the formal economy but misses the informal sector's dynamics. Real wages — nominal wages adjusted for inflation — determine household purchasing power and underpin consumer demand. For policymakers, these indicators help balance inflation control, competitiveness, and the economic welfare of Mexican workers.
Updated: 2026-01-19
Key Takeaways
Following the latest quarterly GDP release from INEGI, real GDP growth in Mexico remains stable at 2.31%, with no change from the previous estimate. The nowcast estimate, updated with the most recent data, shows that the Mexican economy is holding steady for the moment. This stability comes at a time when global markets are feeling the pressure, especially with Wall Street showing signs of unease as investors brace for potential interest rate moves in the U.S. Notably, this economic backdrop is crucial for understanding the conditions under which Mexican growth is playing out.
Private consumption continues to be a bright spot in the economic landscape. With a growth rate of 2.85%, household spending is supporting overall activity, helping to buffer against external headwinds. This steady demand from consumers is vital, especially as the economy navigates a more cautious global trading environment.
Exports are showing a healthy growth rate of 5.21%, reflecting resilient external demand. This figure indicates that despite the broader concerns in the U.S. economy, Mexican goods are still finding their way to international markets. As traders keep an eye on U.S. economic indicators, these export figures signal a continued appetite for Mexican manufacturing, primarily from our biggest trading partner.
Imports are also on the rise, currently at 5.37%, indicating robust domestic demand. This uptick suggests that Mexican consumers and businesses are actively seeking foreign goods, which can be a double-edged sword. While it reflects a strong appetite for consumption and investment, it also raises concerns about the trade balance in the longer term, especially if external conditions shift.
Net trade dynamics remain challenging to assess without precise figures, but the growth in imports compared to exports may hint at pressure on the trade balance. As we look forward, the interplay between these external and internal demands will be key in shaping the economic narrative for Mexico. With the global economy on shaky ground, the balance between exports and imports will be under close scrutiny.
Real activity data tracks the economy's engine — output, spending, and trade — while nowcasts bridge the lag between releases. Real GDP captures total production; private consumption reflects household demand; exports and imports reveal external demand and the flow of inputs for Mexico's trade-exposed, manufacturing-heavy economy. Shifts in U.S. demand, global prices, and the peso often show up first in trade, then filter into GDP and consumption. Because official series arrive with delays and revisions, model-based nowcasts provide an early, probabilistic read for policy timing — useful if treated with uncertainty bands and cross-checked against higher-frequency signals.
Updated: 2026-01-16
Key Takeaways
The December 2025 ENOE survey shows unemployment at 3.28%, nudging up slightly from the previous month. The December 2025 ENOE survey shows unemployment at 3.28%, which is about the 33rd percentile historically. This marks a modest increase of 0.025 from November, continuing an upward trend observed over the last two months, with a total rise of 0.106. These developments come amid a rising tide of uncertainty in the U.S. economy, as highlighted by Wall Street's recent dips in response to concerns over inflation and potential rate adjustments from the Fed.
By gender, unemployment rates reveal a notable consistency, though slightly higher for women. Male and female unemployment rates are at 3.37% and 3.55%, respectively, both reflecting no change from the previous month. Despite this stability, the fact that women's unemployment remains marginally higher suggests a potential area of concern as the labor market navigates these uncertain waters.
Informal employment continues its downward trend, signaling a shift in the labor landscape. The share of informal workers stands at 27.8%, having fallen by 0.0258 from the previous month. This 6-month streak of decline, which totals a reduction of 0.295, could indicate a gradual formalization of the labor market, albeit amidst the broader economic challenges.
Unemployment spells are lengthening slightly, hinting at lingering difficulties for job seekers. The average duration of unemployment now sits at 1.87 months, showing an increase of 0.161 from the last quarter. This uptick, while not alarming, suggests that those out of work are finding it increasingly challenging to secure new positions, contributing to a sense of prolonged difficulty in the market.
Among the unemployed, educational attainment is shifting, reflecting a worrying trend. The educational mix of job seekers shows an increase in the proportion of those with no education, now at 3.51%. This rise, although modest, highlights potential vulnerabilities in the labor market, particularly as the job landscape evolves and requires more skilled workers.
Labor slack and its composition shape inflation pressure, policy timing, and social risk. Unemployment, underemployment, and unemployment by gender reveal how broad and uneven slack is; longer unemployment durations and weaker prospects for the more-educated raise scarring risks and damp wage growth. In Mexico's large informal sector, the informal employment share can swing sharply — often contracting faster in downturns as unprotected jobs are cut first, then rebounding early — masking true slack if headline unemployment alone is tracked. Tracking these dimensions helps distinguish cyclical slack from structural mismatches and calibrate monetary policy accordingly.
Updated: 2026-02-12 by Jorge Martínez
Key Takeaways
INEGI's Q4 2025 productivity release shows secondary sector output at 102, continuing its recent upward trend. The latest INEGI productivity data for Q4 2025, released in December, indicates that the secondary sector productivity index is at 102, reflecting a 3-month upward streak. This growth is largely driven by construction, which has soared to an impressive 106, while mining continues to lag behind at a mere 89.8. Notably, this growth seems to be more concentrated in construction rather than being broad-based across all industries, hinting that while some sectors are thriving, others are still digging themselves out of a hole.
Across the PCA indices, manufacturing composites show a concerning divergence in performance. The composite indices reveal a mixed bag: while productivity is at a modest 0.281, sales have been robust, rising to 0.61, suggesting that demand is still alive and kicking. However, labor demand is on a downward trajectory at -1.49, raising eyebrows about the sustainability of this growth. This divergence between sales and labor demand could signal future challenges—because let’s face it, if the demand is there but the workforce isn’t, we might just be throwing a party with no one to serve the drinks.
Within manufacturing, the top-performing subsectors shine a spotlight on food production, while transport equipment remains in the dumps. The top-performing subsectors include food, which is cruising at 111, a solid indicator of consumer demand, while transport equipment languishes at a dismal 82, reflecting ongoing struggles in that area. Given that food accounts for 18.86% of total manufacturing, its strong performance is undoubtedly propping up the overall figures. Meanwhile, the stark contrast with transport equipment underscores the uneven recovery within the manufacturing landscape—it's like a feast where some are dining lavishly while others are still waiting for their plates.
Productivity trends reveal the economy's capacity to grow without stoking inflation. In Mexico, productivity in the secondary sector — mining, energy, construction, and especially manufacturing — signals how efficiently output expands relative to inputs. Strong productivity gains mean firms can meet demand without raising prices, easing inflation pressure and supporting sustainable wage growth. Weak productivity, by contrast, constrains supply, making cost shocks more inflationary. Manufacturing deserves closer scrutiny, as its diverse subsectors respond differently to global demand, exchange rate shifts, and investment cycles. Tracking these patterns helps judge whether growth is supported by efficiency gains or reliant on credit and labor cost increases.
Updated: 2026-02-06 by Jorge Martínez
Key Takeaways
The January 2026 consumer confidence survey shows the general index at 1.15, reflecting a slight dip in sentiment as worries about rule of law and security continue to cast a long shadow. INEGI's latest January release reveals confidence at the 87th percentile, indicating that while consumers are generally optimistic, they are feeling the pinch as the index fell by 0.123 points from the previous month. The most striking divergence comes from the durables-specific index, which remains a robust 2.11 and suggests that consumers are still keen to splurge on big-ticket items, even as confidence in general stability wanes. This discrepancy hints at a complex consumer psyche that’s eager to buy but wary of the broader economic landscape.
Consumer confidence surveys gauge how secure households feel about their income and the economy. The general confidence index reflects overall sentiment, while sector-specific measures — such as willingness to purchase durables or housing — reveal spending appetite in categories most sensitive to interest rates. Stronger confidence supports consumption and can add inflationary pressure; weaker confidence signals caution and potential slack. For monetary policy, these indicators help anticipate whether rate moves are restraining or stimulating household demand.
COMING SOON...
Updated: 2026-02-04 by Pablo Rivas
Key Takeaways
The January 2026 SPF survey shows the aggregate Concern Index at 2.83, reflecting a dip from last month. The January 2026 SPF survey shows the aggregate Concern Index at 2.83, placing it around the 64th percentile. This index is falling, down by 0.06 from December. It's worth noting, though, that over the past year, concerns have crept up by 0.55, indicating a growing unease among economists despite this recent dip.
Economists have identified public insecurity as the leading constraint on growth, with a notable uptick in concerns over U.S. The key constraints currently cited include public insecurity at 10.1%, U.S. trade policy at 8.4%, and a lack of structural change at 4.2%. The single biggest mover this month is public insecurity, which saw a rise of 1.53 percentage points. This growing concern reflects broader anxieties about safety and stability, which could weigh heavily on economic confidence.
The perceived probability of recession stands at 25.0%, marking a moderate level of concern relative to historical norms. Recession concerns among surveyed economists are currently moderate, reflecting a 25.0% probability compared to the previous quarter. This signals a bit of unease, especially given the elevated standing relative to historical averages. Looking ahead, the probability eases to 15.0% for the next quarter, suggesting some confidence that the economy might stabilize in the near term.
According to forecasters, the peso is viewed as overvalued, indicating a persistent misalignment in expectations. FX expectations suggest the peso is overvalued, with a current-month misalignment of +0.205. This perception has been consistent across the forecast horizon, indicating a sustained belief that the peso is weaker than anticipated. Such misalignment might prompt policymakers to reconsider interventions to stabilize the currency.
Banxico's Survey of Professional Forecasters (Encuesta sobre las Expectativas de los Especialistas en Economía del Sector Privado) polls economists from major financial institutions, consultancies, and research centers. Published monthly, it captures expert views on growth constraints, inflation expectations, and recession risks before official data confirm trends. Because these respondents shape market narratives and influence investment decisions, the survey offers an early window into shifting professional sentiment — making it a valuable leading indicator for policymakers and market participants alike.
Updated: 2026-02-20 by María López
Key Takeaways
As of February 20, 2026, Mexican equity markets exhibit nuanced volatility dynamics. With market data through February 20, 2026, excess returns stand at 0.0408, reflecting a modest rise amidst ongoing economic policy uncertainties. Realized volatility, measured at 0.0088, indicates a persistent upward trend, suggesting a growing nervousness among investors. Notably, illiquidity has surged to 137.4537, marking a significant increase that underscores heightened market tensions. These metrics collectively signal a cautious environment as market participants grapple with the implications of potential monetary policy shifts by Banxico.
The decomposition shows that recent volatility has been primarily driven by US policy shocks and prevailing uncertainty. Key contributors to the recent volatility increase include liquidity dynamics and economic uncertainties, with US policy shocks playing a critical role. This interplay highlights a market increasingly sensitive to external influences, suggesting that domestic economic conditions may not be the sole focus of investor sentiment. The recent uptick in excess returns, coupled with the broader volatility landscape, reflects a complex web of influences where both local and global factors are at play.
Investor sentiment remains fraught with caution as policy uncertainty lingers. Investor sentiment, as captured by various indices, illustrates a landscape marked by anxiety; the AAII sentiment index remains subdued, indicating a hesitance among retail investors. Concurrently, the National Association of Active Investment Managers (NAAIM) shows similar caution, reflecting a more defensive posture among active managers. This atmosphere of uncertainty is compounded by rising Economic Policy Uncertainty (EPU) levels, suggesting that market participants are bracing for potential shifts in economic policy that could further complicate the investment narrative.
Volatility Measures
| Measure | Jan 2026 | Feb 2026 | Δ | Top Driver |
|---|---|---|---|---|
| Excess Return | 0.2107 | 0.3340 | +0.1233 | US Policy Shocks (+0.145) |
| Realized Volatility | 0.0093 | 0.0101 | +0.0008 | Const (+0.010) |
| Illiquidity (Amihud) | 105.3916 | 102.0601 | -3.3315 | Const (+142.308) |
Monthly averages. Top Driver = largest OLS category contribution to latest value.
Financial market returns, volatility, and liquidity signal investor sentiment and risk appetite. Excess returns over government bonds capture the risk premium investors demand for holding equities; wider spreads suggest higher perceived risk or stronger growth prospects. Realized volatility in a stock market index reflects uncertainty — sharp swings indicate fragile sentiment and raise the cost of capital. Illiquidity shows how trading volume and price impact interact: when liquidity dries up, small trades can move prices disproportionately, amplifying shocks. For monetary policy, these indicators matter because they shape funding costs, investment flows, and the broader transmission of rate decisions into financial conditions.
Volatility drivers are analyzed in two steps. First, Principal Component Analysis (PCA) groups the six SPF concern categories and investor sentiment indicators (AAII bull-bear spread, NAAIM exposure index) into thematic driver clusters that capture common variation. Second, an OLS regression decomposes recent volatility movements into contributions from each driver cluster, quantifying how much of the observed excess return and realized volatility is attributable to policy uncertainty, external sentiment, and domestic macro conditions. The decomposition is descriptive — it identifies contemporaneous associations, not causal effects.
Updated: 2026-02-20 by María López
Key Takeaways
Banxico's February 2026 credit release shows money market spreads tightening amidst a cautious outlook. Following the latest February lending data, rate premia reflect a narrowing trend, with funding and TIIE spreads settling at 0.195 against the backdrop of a policy rate of 11.25%. This represents a significant reduction of -0.0606 from the previous month. The ongoing downward streak of three months highlights a shift in market sentiment, hinting at potential easing as economic conditions evolve.
Household mortgage rates present a stark picture of rising costs for consumers. The total annual cost of mortgages (CAT) currently averages 14%, with a range spanning from 11.1% to 28.2%. This rising cost reflects a limited pass-through effect from the policy rate, raising questions about affordability for potential homeowners and revealing the pressures on consumer spending amid a delicate economic environment.
Debt issuance patterns reveal a notable shift in corporate financing dynamics. Corporate financing is increasingly leaning towards fixed-rate instruments, which now comprise 18.31% of total debt issuance, compared to 9.89% for variable inflation-linked rates. This preference for stability highlights firms' cautious approach amid uncertain economic conditions, signaling a strategic pivot as companies navigate the complexities of current market dynamics.
Rate premia show how market and bank funding costs move relative to the policy rate, indicating the efficiency of monetary transmission. Household mortgage rates capture the cost of long-term borrowing — their sharp rise in recent years signals affordability pressures and distributional effects, as many families face double-digit costs. Debt issuance patterns, normalized by GDP, reveal how firms finance themselves; the balance between fixed and variable rates matters for vulnerability to policy shifts. Together, these indicators show how policy rates filter into real borrowing conditions, affecting credit demand, investment, and ultimately growth and inflation dynamics.
