Cetes Once Again Offer Real Returns; Latest Auction Shows Yields Outpacing Inflation
In the most recent government securities auction, Treasury Certificates (Cetes) registered mixed movements, confirming a rate environment where, across several maturities, yields still comfortably outperform inflation. According to data from the Bank of Mexico, the 28-day note rose about 28 basis points to settle near 7.47% annually, while the 91- and 182-day terms moved marginally to around 7.44% and 7.48%, respectively. For longer-term fixed-rate government securities, bids came in around 7.85%—a level that, compared to current inflation, means an attractive real premium.
Headline annual inflation stood at around 3.74% in the first half of September, within Banxico’s target range (3% ± 1 percentage point). This result, along with mixed signals in core inflation—particularly in services—has fueled expectations of a gradual, data-dependent monetary easing cycle. The behavior of primary yields reflects not only the market’s reading of monetary policy’s path but also both external factors (trajectory of the Federal Reserve, dollar strength, and exchange rate volatility) and domestic ones (public spending dynamics and financing needs).
Cetes are discount instruments: each has a face value of 10 pesos but is purchased below that amount, and on maturity, the holder receives the full face value; the difference is the yield. Standard maturities offered by the federal government are 28, 91, 182, and 364 days. Yields for horizons beyond one year apply to other debt papers (like Bonos M), not Cetes. To simply estimate the “real” gain, you can subtract annual inflation from the nominal yield: with a 28-day rate close to 7.47% and inflation at 3.74%, the ex-ante real premium is roughly 3.7 percentage points before taxes. It's important to consider the required tax withholding on interest and that the effective yield depends on the chosen maturity and whether the investment is rolled over at maturity.
In terms of strategy, short-term maturities offer flexibility to reinvest in case the rate cycle changes, though there’s reinvestment risk if rates go down. Longer maturities lock in the rate for a longer period, which could be advantageous if the market moves into a rate-cutting phase. A conservative alternative is to “ladder” purchases across different maturities to smooth out exposure to rate movements. Those who need early liquidity can sell on the secondary market, but prices may fluctuate, so for those aiming to preserve capital and capture the agreed yield, it's most prudent to hold to maturity.
For small savers, Cetesdirecto—the official platform—lets you invest starting from very low amounts, with no commissions and access to primary auctions, making it easier to participate in positive real returns with sovereign risk in pesos. Even so, it’s advisable to bear in mind your spending horizon, risk tolerance, and tax burden; government debt is among the most conservative assets in local currency, but it isn’t immune to price fluctuations if sold before maturity.
On the macroeconomic front, positive real yields tend to anchor price expectations, although they also increase funding costs for both the public and private sectors. Going forward, the path for local rates will depend on the persistence of services inflation, food and energy price trends, the Fed’s stance, and the peso’s performance. Structural factors such as nearshoring and external demand from the U.S. may help support investment and employment, but bottlenecks in infrastructure and the financial health of public enterprises will also affect risk premiums.
In summary, the auction confirms that Cetes continue to offer positive real yields versus current inflation. For savers, it’s an opportunity to preserve purchasing power with a low-risk peso instrument; for the broader economy, it’s a signal that the disinflation process is advancing, though the path for rates will remain data- and externally dependent.
