Bank of Mexico expected to cut interest rates by 0.5% despite recent inflation surge

From Yahoo Finance: 2025-06-10 13:12:00

Mexico’s central bank is expected to cut key interest rates by 0.5% despite recent inflation surge. In May, inflation surpassed target levels, with headline rate at 4.42% and core inflation at 4.06%. Economists predict fourth consecutive 50 basis point cut on June 26, bringing rates to 8%, lowest in three years.

Experts suggest central bank may benefit from pausing rate cuts due to inflation surge impacting long-term expectations. Despite potential economic boost, caution is advised for future moves to maintain stability. Bank of Mexico’s governing board plans to balance economic weakness with monetary policy adjustments, potentially cutting rates by 0.5% in June.

Mexico’s economy faces risks from weak domestic activity and uncertainty over U.S. trade policies, narrowly avoiding recession in Q1. Central bank aims to balance economic factors with rate cuts to support struggling economy.Governor Victoria Rodriguez emphasizes effects of recession on monetary policy decisions, highlighting need for caution in future rate cuts.



Read more at Yahoo Finance: Bank of Mexico poised for 50 basis points rate cut despite inflation rebound