“(The Governing Board) took into account the trajectory that the underlying component has followed and that it is expected to continue declining. It assessed that, although the inflationary outlook still merits a restrictive stance, the evolution it has presented implies that it is appropriate reduce the degree of monetary tightening,” he noted in the statement.
In October, non-core inflation – which measures volatile prices such as agricultural prices – was 7.68% while core inflation slowed to 3.80%.
Regarding inflation forecasts, Banxico raised expectations for the fourth quarter of this year to 4.7% and kept the 2025 forecasts almost unchanged.
Inflation is expected to reach the target in the fourth quarter of 2025.
Last week, the Federal Reserve also lowered the rate interest rate at 25 basis points, leaving it in a range of 4.50%-4.75%.
The Fed issued a statement that gave signs of caution and analysts expect that there will be no rate adjustments next December.
“By 2025, the terminal rate could be 3.50%, which reflects a scenario of uncertainty regarding the economic policy decisions made by the new Trump government. This is because the victory of the Republicans also implies having a majority in both chambers and without checks and balances. Economic policy can exacerbate the risks for inflation, as well as on the fiscal side,” Invex highlighted in a report.
