Stay informed with the latest insights on Mexico's economy via statistics and AI analysis and synthesis.
Updated: 2026-02-03
The European Union has postponed the publication of employment data due to a partial government shutdown. This delay affects the timely release of important labor market statistics, which are crucial for economic analysis and policy-making. — El Economista, 02 Feb 2026. Read more
Mexico will introduce new 10 peso coins in 2026, featuring updated designs and security features. The coins aim to enhance the currency's durability and prevent counterfeiting. Details about the specific characteristics of the new coins were highlighted in the announcement. — El Economista, 02 Feb 2026. Read more
On February 2, 2026, the Mexican peso appreciated against the US dollar. The article highlights the positive impact of the Niño Dios on the peso's performance. Specific figures regarding the exchange rate changes were not provided. — El Financiero, 02 Feb 2026. Read more
From February 2 to 6, key economic indicators will be released, including data on remittances and fixed investment. Additionally, the Bank of Mexico (Banxico) is expected to make an announcement during this period. These indicators are crucial for understanding the current economic landscape. — El Economista, 02 Feb 2026. Read more
Bancomext announced its intention to place 190,000 million pesos in new credits in 2026. This initiative aims to support various sectors and enhance economic development in Mexico. — Expansión, 02 Feb 2026. Read more
Banco Nacional de Comercio Exterior (Bancomext) is revising its operational strategy to enhance support for Mexican exporters. The bank aims to increase its financing capacity and improve its services to adapt to changing market conditions. Claudia Sheinbaum, the President of Mexico, emphasized the importance of this initiative for boosting the national economy. — Expansión, 31 Jan 2026. Read more
The article highlights recent discussions among central banks, including Banxico and the Federal Reserve, regarding their monetary policy strategies. Banxico Governor Victoria Rodríguez Ceja emphasized the importance of maintaining stability in the financial system. Fed Chair Jerome Powell reiterated the need for careful assessment of economic indicators to guide future decisions. — Expansión, 31 Jan 2026. Read more
Wall Street ended the trading session in the red following the nomination of Kevin Warsh to the Federal Reserve. The Mexican Stock Exchange (BMV) also experienced a decline, falling by 2.80%. This market reaction reflects investor concerns regarding the implications of the nomination on monetary policy. — El Financiero, 30 Jan 2026. Read more
The Banco Central de Colombia has increased its interest rates by 100 basis points, bringing the new rate to 10.25%. This decision reflects the bank's response to current economic conditions and aims to manage inflationary pressures. — El Economista, 30 Jan 2026. Read more
The Mexican peso experienced a slight decline against the US dollar, although it is expected to close the month on a solid note. The article highlights the performance of the peso in the context of recent market trends, without providing specific figures or projections. — El Economista, 30 Jan 2026. Read more
Trump says Mexico will cease oil exports to Cuba — Google News, 03 Feb 2026. Read more
Mexico will “cease” sending oil to Cuba, says Trump — Google News, 02 Feb 2026. Read more
Mexico’s president pledges to send aid to Cuba despite US efforts to cut oil access — The Guardian, 02 Feb 2026. Read more
Mexico's Sheinbaum, Trump talk trade as USMCA review approaches — Google News, 02 Feb 2026. Read more
Mexico defies the United States, ignores Trump's threats, and bets on oil to save Cuba from an unprecedented economic collapse — Google News, 02 Feb 2026. Read more
Mexico’s Winning Edge in Trump’s Trade War — Google News, 01 Feb 2026. Read more
How Lego got swept up in US-Mexico trade frictions — Google News, 31 Jan 2026. Read more
Mexican economy posts worst GDP growth since Covid — Google News, 31 Jan 2026. Read more
Mexico to ask Trump to ship oil to Cuba; warns of humanitarian crisis on island due to US tariffs — Google News, 31 Jan 2026. Read more
Updated: 2026-01-19
Key Takeaways
Following the December 18, 2025 monetary policy decision, Banxico's policy rate stands at 7.00%, a delicate equilibrium achieved after a series of twelve consecutive cuts totaling an audacious 4.00 percentage points since August 2024. In this era of reduction, Banxico has artfully performed a pirouette away from tightening, yet the echoes of structural deficiencies linger ominously in the background, casting a pall over the otherwise serene stage. Economists remain focused on the rule of law and security issues, with mentions rising by 3.2% month-over-month, signaling heightened attention to risks that could undermine the very foundation of this monetary choreography.
Relative to the United States, the Fed's target rate currently hovers at 3.62%, creating a notable rate differential of 3.38 percentage points in favor of Mexico. While both central banks have recently embarked on a synchronized path of rate cuts, Banxico has taken the first step, showcasing its proactive stance in the face of external economic pressures. This first-mover advantage, however, may soon be tested as the Fed prepares to convene in just twelve days, potentially altering the delicate balance of influence between these two monetary titans.
The rate differential, while ostensibly advantageous, could engender complex ramifications for capital flows and foreign exchange stability. For markets, this substantial spread may entice foreign investment, yet it simultaneously raises the specter of currency pressure should investor sentiment waver amidst rising concerns about Mexico's rule of law and security. Thus, Banxico finds itself in a precarious position, where the allure of lower rates must be weighed against the realities of economic fragility and investor confidence.
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: 2026-02-03 by Pablo Rivas
Key Takeaways
With fresh data on bond yields and an eye on the peso, Banxico's next move is shaping up to be a nail-biter. Our model-based expectations suggest there's a 58% chance of holding rates steady at the upcoming decision on February 5th, 2026. This presents a substantial chance of no action, reflecting the market's cautious stance amid uncertain economic signals. Since the last update, the Mean hasn’t swung materially, staying aligned with the hold probability, while the model points toward a 25bp cut as the next most likely move. The most probable bucket remains the hold option, with a notable 38.9% chance of a 25bp cut.
On the data front, recent updates revealed some shifts worth noting. We saw a slight uptick in CPI figures and a stabilization in bond yields since our last analysis. This refresh keeps our outlook current, but the changes weren’t drastic enough to redefine our trajectory.
Diving into the drivers, it’s a mixed bag influencing Banxico's considerations. We’re experiencing moderate hawkish pressure from rising bond yields, while the CPI increase adds a slight dovish pull to the mix. The peso’s stability has been economically negligible for our decision-making processes at this point. Additionally, the policy uncertainty stemming from recent headlines regarding U.S. monetary policy continues to loom large, influencing the committee's judgment beyond mere model mechanics.
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.
Updated: 2026-01-31 by Pablo Rivas
Key Takeaways
Bond prices as of 2026-01-31 show the 10Y-3Y spread at 1.25 percentage points, marking a slight uptick of 0.06 from the previous observation. Following recent bond market activity through January, we see the nominal 10Y-3Y spread reflecting a healthy balance within the yield curve, indicating that investors are still keen on long-term bonds amid uncertainty. The breakeven inflation spread points to a market that anticipates inflation pressures, though the recent uptick in the nominal spread suggests a belief in easing monetary conditions down the line. Overall, the data paints a picture of cautious optimism, particularly as we gear up for Banxico's upcoming rate decision.
The curve shape suggests that markets are pricing in about a 55% chance of a rate cut at the Banxico meeting on February 5, leaning toward easing given the economic policy uncertainty and moderating inflation. Forward guidance shapes expectations.
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.
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: 2026-01-30 by M.L.
Key Takeaways
The mid-January 2026 CPI release shows headline inflation at 3.74%, comfortably nestled within Banxico's target band. The mid-January 2026 CPI release shows headline inflation at 3.74%, sitting at the 36th percentile and remaining well within Banxico's target band of 3% ± 1pp. This marks a modest increase of 0.10 percentage points from the previous month, reflecting a controlled rise in consumer prices. While the current level is stable, the slight uptick indicates that price pressures, although manageable, are still present in the economy. This situation underscores the importance of vigilance as the central bank navigates its monetary policy landscape in a post-pandemic recovery phase.
Core inflation, which excludes volatile food and energy prices, tells a different story with greater intensity. Core inflation, which excludes volatile components, registered at 4.50%, significantly higher than headline inflation and positioned at the 76th percentile. This indicates a divergence as core inflation has risen by 0.10 percentage points from the prior month, suggesting that underlying inflationary pressures are becoming more pronounced. The widening gap from the target, now 1.5 percentage points above the 3% mark, raises concerns about persistent inflationary trends in essential goods and services. The central bank's task of anchoring expectations becomes increasingly critical as it contemplates future policy adjustments.
Trade prices reveal a mixed picture, with export prices climbing significantly, while import prices remain stable. Trade prices have shown notable movement, particularly in export indices, which surged to 7.05%, reflecting an increase of 1.15 percentage points compared to the prior month. This marked uptick in export prices signals robust demand dynamics in external markets, potentially leading to increased revenue for key sectors. In contrast, import prices have remained relatively stable at 2.30%, indicating that while domestic inflation pressures are less pronounced on imported goods, they are not entirely absent. The interplay between these trade price movements could have significant implications for the broader inflation landscape and monetary policy, especially as the central bank weighs its response to these differing signals.
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 ±1 percentage point tolerance band. 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.
Updated: 2026-01-31 by Pablo Rivas
Key Takeaways
Mexican house price inflation has ticked up to 8.86% YoY as of July 2025, signaling a modest rise despite overall concerns in the economy. This latest figure marks a slight increase of 0.15 percentage points from the previous quarter, placing it in the 79th historical percentile since 2006. However, when you stack it next to the headline CPI at 3.69% and the housing CPI subcategory at 3.35%, it reveals a hefty premium of about 5.17 percentage points and 5.51 percentage points, respectively. Yet, keep an eye on the horizon, as the nowcast hints at some downward pressure that could shift the picture.
The DFM nowcast, which just came in at 6.88% YoY for January 2026, suggests a notable divergence from the observed house price inflation. With a gap of nearly two percentage points below the observed rate, the model is pointing to some downward pressures driven by auxiliary indicators like mortgage lending and CPI housing. This indicates that while house prices have been climbing, the underlying trend might be cooling off, leading to a more cautious outlook in the months ahead.
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: 2026-01-19
Key Takeaways
The December 2025 IMSS release shows unit labor costs at 3.89%, reflecting a rise in wages outpacing productivity. Following December's formal sector wage data, ULC in manufacturing is climbing, indicating that wages are growing faster than productivity. This latest figure is in the 80th percentile and marks a month-over-month decline of 1.01 percentage points. It suggests that businesses might face cost-push inflation pressures, which could squeeze profit margins and affect competitiveness down the line.
Real wages in the formal sector continue to show positive growth, signaling improved purchasing power for workers. Manufacturing real wages are currently up by 3.29%, while retail real wages are slightly higher at 3.77%. Even though both sectors are experiencing gains, the decline in growth rates compared to previous months indicates that households may be feeling a pinch, as the overall growth is slowing. However, the fact that purchasing power is still on the rise is a silver lining for households navigating through economic uncertainties.
Across sectors, manufacturing and retail diverge in their labor cost dynamics, with manufacturing showing stronger wage growth. Manufacturing is currently outperforming retail in terms of unit labor costs, which are rising faster than those in the retail sector. This divergence suggests that while consumers in retail may be enjoying a bit of wage growth, manufacturers are grappling with heightened labor costs that could impact their pricing strategies. Retail, on the other hand, is lagging behind, with ULC growth remaining more subdued at 3.56%.
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: 2026-01-16
Key Takeaways
INEGI's Q4 2025 productivity release shows secondary sector output at 101, marking a modest uptick but highlighting a mixed landscape across its subsectors. The latest INEGI productivity data for Q4 2025, released in January 2026, reveals secondary sector output at 101, reflecting a two-month upward trend. While manufacturing continues to hold its ground, the mining sector is struggling, staying down near the 10th percentile of its historical range. Overall, the growth appears to be somewhat concentrated in a few areas, particularly construction, which has been on a solid upward path, leaving mining and energy in the dust.
Manufacturing composites show a mixed bag of trends, with productivity slipping while sales hold steady. Across the PCA indices, manufacturing composites reveal a slight dip in productivity, down 0.223, while sales have been more resilient, inching up by 0.0281. This divergence raises eyebrows about the sustainability of the gains, especially as labor demand remains weak, sitting at a dismal -1.49, suggesting that while some sectors are chugging along, the overall health of the industry might not be as rosy as it seems.
Within manufacturing, transport equipment and food sectors stand out, while the chemical industry falters. The top-performing subsectors include transport equipment, which has seen a remarkable rebound with a 5.7 uptick, and food, holding steady despite a recent fall. However, the chemical industry is dragging down the aggregate, struggling with a recent drop of 7.14, reflecting broader challenges in that space. The manufacturing landscape is thus a patchwork, where a few bright spots shine amid the shadows of the lagging sectors.
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: 2026-01-19
Key Takeaways
The December 2025 consumer confidence survey shows the general index at 1.30, reflecting an elevated sentiment despite some underlying tensions. INEGI's latest December release reveals confidence at an optimistic 1.30, placing it in the 89th percentile. While this indicates a generally upbeat outlook among consumers, the durable goods sector paints a different picture, standing at a striking 2.02 yet experiencing a recent dip. This divergence suggests that while folks feel good about spending in the short term, there's a lingering caution when it comes to bigger investments, hinting at broader economic uncertainties.
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: 2026-02-01 by María López
Key Takeaways
The December 2025 SPF survey reveals a notable shift in economic sentiment. The December 2025 Survey of Professional Forecasters shows the aggregate Concern Index at 2.9, placing it in the 64th percentile of historical data. This figure reflects a slight decline of 0.09 from the previous month, suggesting a momentary easing of anxieties. However, when viewed over a longer horizon, the index has risen by 0.5 points over the past six months, indicating that underlying concerns remain palpable.
Economists have identified public insecurity as the most pressing growth constraint. The key constraints currently cited include public insecurity at 8.55%, US trade policy at 6.67%, and domestic market weakness at 4.07%. Notably, public insecurity saw the largest month-over-month increase, rising by 2.08 percentage points, which underscores the growing apprehension that could hinder economic stability and growth.
The perceived probability of recession among surveyed economists has surged to alarming levels. Recession concerns among surveyed economists have reached 36.7%, categorizing them as elevated relative to historical norms, specifically placing them in the top quintile. This stark figure reflects heightened unease about the economic trajectory, with the outlook for the next quarter suggesting a moderate probability of 26.7%, indicating a potential softening but still a significant level of concern.
According to forecasters, expectations surrounding the peso indicate a pronounced overvaluation. FX expectations suggest that forecasters see the peso as overvalued, with the current month reflecting a misalignment of +0.486. This sentiment has shown persistence across future horizons, as forecasters maintain a consistent outlook on the peso's weakness, further complicating Mexico's economic landscape amid global uncertainties.
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: 2026-01-16
Key Takeaways
Mexican equity markets as of January 16, 2026 show excess returns at -0.0390, reflecting a recent dip in sentiment and uncertainty among investors. With market data through January 16, 2026, realized volatility stands at 0.0083, indicating a slight uptick amid a backdrop of mixed signals. The illiquidity index has jumped, pointing to a rise in market stress, though it remains within moderate historical ranges. Notably, the excess return index has tumbled from previous levels, suggesting a cooling in market enthusiasm after a spell of volatility.
The decomposition shows that recent volatility has been primarily driven by US policy shocks and lingering uncertainty. US policy shifts continue to loom large over market sentiment, contributing significantly to the latest volatility moves. Alongside this, uncertainties around economic policy are creating ripples, adding to the overall market apprehension. These persistent factors hint at a challenging environment for investors, especially as they navigate the upcoming decisions from Banxico.
Investor sentiment remains tepid, with both AAII and NAAIM indicators reflecting a cautious stance among market participants. Policy uncertainty remains elevated, as reflected in the Economic Policy Uncertainty (EPU) index, which underscores the trepidation in the air. This combination of cautious sentiment and persistent uncertainty suggests that market players are bracing for potential shifts in monetary policy, particularly as we approach Banxico’s decision on February 5.
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.
Updated: 2026-01-16
Key Takeaways
Banxico's January 2026 credit release shows money market spreads tightening, reflecting a shift in lending dynamics. Following the latest January lending data, rate premia are sitting pretty at about 0.188, which is a good bit tighter than last month. It’s been on a two-month slide, narrowing by around 0.186 since November. This tightening hints at a more favorable borrowing environment, though we still need to keep an eye on how this plays out in the broader economic landscape.
Household mortgage rates are still feeling the pinch, but there's a flicker of hope. The total annual cost of mortgages is averaging 13.9%, with a range from 10.7% to 28.2%. The pass-through from the policy rate to mortgage costs has been less than ideal, squeezing affordability for many families. This situation means buyers might need to tread carefully as they navigate the housing market.
Corporate financing is shifting gears, and the latest trends show a clear preference for fixed-rate debt. Debt issuance patterns show that fixed-rate instruments now make up about 19.63% of GDP, while variable rates are lagging behind at 20.11% combined. This tilt towards fixed rates suggests firms are locking in costs amid uncertainty, which could help stabilize their financial planning moving forward. It’s a strategic play that reflects the cautious optimism in the current lending landscape.
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.
