Banxico Cuts Rate to 6.50% in 3-2 Split Vote; Signals End of Easing Cycle After 475bps of Cuts

On May 7, 2026, Banco de México's Governing Board voted 3-2 to cut the benchmark interest rate by 25 basis points to 6.50% — the 15th consecutive cut since March 2024, bringing cumulative easing to 475bps from the 11.25% peak. Voting in favor: Governor Victoria Rodríguez Ceja and Deputy Governors Gabriel Cuadra and Omar Mejía. Voting to hold at 6.75%: Deputy Governors Galia Borja and Jonathan Heath. Critically, the Board's forward guidance explicitly signaled the easing cycle is over: 'The Board considers it appropriate to maintain the reference rate at its current level' going forward. Median analyst forecasts now put the year-end rate at 6.50% with no further cuts expected through 2027. The decision came amid Q1 2026 GDP contraction of -0.8% quarterly, annual inflation decelerating to 4.45%, and the peso trading near multi-week highs around 17.29 MXN/USD. The 200bp rate differential over the U.S. Fed (approx. 4.5%) had been supporting carry trade and the strong peso. Mexico Business News noted the decision reflected the end of a historic 15-cut easing cycle that began as inflation returned toward target following the COVID-era tightening.