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Mexico Inflation Surges, Rate Cuts Loom
8 Apr
Summary
- Headline inflation likely accelerated in March for the third consecutive month.
- Core inflation is expected to have declined for the second month in a row.
- The central bank resumed its easing cycle last month, lowering its rate to 6.75%.
Mexico's headline inflation likely surged in March, marking its third consecutive monthly increase and moving away from the central bank's target. The annual inflation rate is estimated to have reached 4.63%.
Conversely, core inflation, which excludes volatile items, is anticipated to have decreased for the second month. This measure is projected to fall to 4.46%, though it remains above the target range.
These inflation trends support expectations of further rate cuts by the Bank of Mexico. Last month, the central bank surprised markets by resuming its easing cycle, reducing its benchmark rate to 6.75% from 7%.
Recent analyses suggest the bank's adjustment period is nearing its end, with projections indicating one more 25 basis point cut by the close of 2026.
