Mexican Interest Rate Decision 6.50% vs. Exp. 6.5% (Prev. 6.5%); vote was unanimous

The Mexican economy is anticipated to expand during Q2 2026, after having contracted during the previous one. Economic slack is expected to continue throughout the forecast horizon and significant downward risks to economic activity persist. Headline inflation forecasts were revised downwards for Q2 2026 due to lower levels of non-core inflation anticipated for that period. Core inflation forecasts were adjusted slightly upwards between Q2-Q4 2026. Headline inflation is still expected to converge to the target in Q2 2027. The balance of risks for the trajectory of inflation within the forecast horizon remains biased to the upside. The changes in economic policy by the US administration and a possible extension of geopolitical conflicts continue adding uncertainty to the forecasts. Their effects could imply pressures on inflation on both sides of the balance. Looking ahead, the Governing Board estimates that it will be appropriate to maintain the reference rate at its current level. It judges that the monetary policy stance is well-suited to face the challenges posed by the macroeconomic environment, including those associated with the international context. The central bank reaffirms its commitment to its primary mandate and the need to continue its efforts to consolidate an environment of low and stable inflation.