Economics
Mexico Airport Vote Leads JPMorgan and Itau to Predict Rate Hike
- Banks see Banxico acting to contain peso’s impact on inflation
- Most analysts had seen next move as reduction early next year
This article is for subscribers only.
Expectations for Mexico’s monetary policy were turned upside down after president-elect Andres Manuel Lopez Obrador’s decision to cancel construction of a new Mexico City airport sent the peso to its biggest decline in two years.
JPMorgan Chase & Co. and Itau Unibanco Holding SA now expect policy makers to lift borrowing costs by a quarter point at their next scheduled decision on Nov. 15 to contain fallout from the currency rout, after previously forecasting no change. JPMorgan says there’s a significant possibility of a half-point increase or an additional quarter point hike in December.