“This data (on inflation) did not really change our outlook for the market. The general message from the Fed is that very soon inflation has to start to ease,” Morales said.
For the analyst, a high inflation data can still be observed in April to then start a downward trajectory. The specialist stressed that this is subject to the escalation of the conflict between Russia and Ukraine.
Gabriela Siller, director of financial economic analysis at Banco Base, commented that the inflation data is called “Putin’s inflation” due to the rise in energy and food prices due to Russia’s invasion of Ukraine.
Banco Base estimates that the inflation figure for April will be 8.3% with the possibility of reaching up to 9% in June. The forecasts consider pressures on food and services as producers pass on their recent cost increases to consumers.
“Towards the second half of the year, the base scenario projects lower annual inflation, standing at 6.4% at the end of the year. However, the inflation outlook is highly uncertain, since the most recent shocks on commodity prices occurred after the beginning of the war in Ukraine and the entry into force of sanctions against Russia,” Banco Base detailed.
Contagion in Mexico?
Siller stressed that the data from the United States will not cause high inflation in Mexico, nor vice versa. “It’s supply chain disruptions, product shortages, rising logistics costs and rising commodity prices that are driving inflation up,” she said.
The inflation data in the United States will also cause an impact on the expectations of consumers, who will be more cautious when making purchases; however, Cristina Morales considered that the solid employment data will weigh more on the US economy.
For the end of this year, Valmex estimates that inflation in the United States will close at 4%, a level above the Fed’s inflation target of 2%.
