Mon Sep 23 17:40:53 UTC 2024: ## Mexico’s Inflation Continues to Cool, Setting Stage for Potential Rate Cut
**Mexico City, September 18, 2023** – Mexico’s annual inflation is projected to continue its downward trend in the first half of September, according to a Reuters poll of analysts. This news has heightened expectations that the central bank will lower its benchmark interest rate for the second time this year during its policy announcement later this week.
The median estimate from 11 analysts predicts overall consumer price inflation (CPI) will drop to 4.73%, marking its fourth consecutive fortnight of decline. While this would represent a significant improvement, it would still remain above the official target of 3% plus or minus one percentage point.
Similarly, core inflation, which excludes volatile goods and provides a clearer picture of underlying price trends, is expected to decrease to 3.97%, its lowest level since February 2021.
In the first 15 days of September, prices are estimated to have increased by 0.15% compared to the previous two weeks, with core prices rising by 0.23%.
The central bank board previously lowered its benchmark interest rate by 25 basis points in early August, in a decision split between board members. The board signaled that the easing inflationary environment could open the door for further monetary easing.
The Bank of Mexico’s next monetary policy decision will be announced on Thursday. The timing coincides with the Federal Reserve’s initiation of a monetary easing process with a significant half-percentage-point rate cut, further encouraging the Mexican central bank to consider another interest rate reduction.
The National Statistics Institute (INEGI) is scheduled to release the official consumer price data for the first half of September on Tuesday.
First Piper 