Global Macro Service > Data Insights > Mexico
Consumer prices increased by 0.38% in February, taking the annual inflation rate to 5.34%, 0.2ppt lower than in the previous month. The figures were marginally better than expected but we still think that inflation is unlikely to fall below the 4% upper limit of the target band before November.
Banxico's hawkishness could be tamed if the disinflation process continues in this orderly fashion in the coming months. We think Banxico will likely stay put during its April monetary policy meeting, and although one additional rate hike in May or June remains on the cards, it is now slightly less likely.
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