Mexico's Inflation Meets Expectations in April Ahead of Rate Decision

• Mexico's annual inflation rate came in line with market expectations in April, accelerating from the previous month but still within the central bank's target range. That should allow the Bank of Mexico to keep lowering borrowing costs in Latin America's second-largest economy, which faces a weakening trend amid mounting global trade uncertainties.
• Consumer prices in Mexico rose 3.93% in the year through April, according to national statistics agency INEGI, roughly in line with economists' forecasts in a Reuters poll and up from 3.8% the previous month.
• Mexico's central bank, also known as Banxico, has an inflation target of 3%, plus or minus a percentage point. In March, it cut its interest rate by 50 basis points for the second consecutive time to 9%, the lowest since September 2022, and policymakers have signalled that further easing should come if inflation holds steady as expected. The central bank's next decision is scheduled for May 15.
• JPMorgan economist Gabriel Lozano said that Banxico is widely expected to keep the 50-basis-point easing pace, noting that although the impact of U.S. tariffs brings downside risks to growth, inflation has not substantially improved. In April alone, consumer prices in Mexico rose 0.33%, while the closely watched core index, which strips out some volatile food and energy prices, rose 0.49%. Both were in line with market forecasts.
• The 12-month core index stood at 3.93%, up from 3.64% in March, with core inflation driving the overall index up.

(Source: Reuters)