Mexico’s annual inflation dropped to 3.69% in early January, below both expectations and December’s 3.99% rate, as Banxico weighs accelerating its monetary easing cycle.
While core inflation remained stable at 3.72%, a 2.67% decline in produce prices helped counter an 0.82% surge in energy costs.
Despite the favorable inflation data, some central bank officials remain cautious about larger rate cuts due to uncertainty surrounding potential US tariffs and Fed policy.
Market expectations are split, with 17 of 30 economists forecasting a quarter-point cut to 9.75% in February, while 13 predict a half-point reduction to 9.5%.