From Yahoo Finance: 2025-04-10 11:49:00

The Bank of Mexico’s board members are concerned about the impact of President Trump’s tariffs on inflation, noting uncertainty in future forecasts. Despite an increase in annual inflation to 3.80%, it remains within the central bank’s target range. The board expects inflation to reach its target by the third quarter of 2026.

In response to trade tensions and a weakening economy, Banxico unanimously cut interest rates by 50 basis points to 9.00% last month. Board members are wary of further exchange rate depreciation and economic weakening due to uncertainty around U.S. trade policies. Some predict a deepening economic contraction in the first quarter of 2025, potentially leading to a technical recession.

The effects of U.S. tariffs are already impacting Mexico’s economy, with one board member noting additional weakening. Uncertainty surrounding economic policies and trade tensions have heightened inflation risks, despite improvements in the balance of risks. The central bank remains vigilant in monitoring the evolving economic landscape and its impact on inflation.

Read more: US tariffs add uncertainty to inflation