May 18 (Reuters) – Mexico’s headline inflation likely slowed in the first half of May for the fourth consecutive 15-day period, a Reuters poll showed on Monday, reinforcing expectations that monetary policy will remain on hold for an extended period.
• Headline inflation for the first half of May is expected to ease to 4.13% year-on-year, according to the median forecast of 12 analysts polled by Reuters.
• Consumer prices are forecast to have fallen 0.15% from the preceding half-month period.
• The Bank of Mexico earlier this month ended its rate-cutting cycle, leaving its benchmark interest rate at 6.50% and signaling that it would be appropriate to keep rates at that level going forward.
• Core inflation, regarded as a better measure of underlying price pressures because it strips out volatile items, is seen edging up to 4.26% year-on-year after six consecutive fortnightly declines. Core prices are forecast to have fallen 0.17% from the previous half-month.
• Barclays said the slowdown in headline inflation was driven mainly by summer electricity tariff discounts and a reversal in agricultural prices, particularly tomatoes, while the uptick in core inflation reflects persistent pressure in services.
• Barclays added that only a significant rise in core inflation or an interest rate increase by the U.S. Federal Reserve would prompt the Bank of Mexico to begin tightening again.
• The U.S. Federal Reserve kept rates unchanged at its April meeting, though markets are beginning to price in a rate hike toward late this year or early 2027.
• Statistics agency INEGI is due to publish official inflation figures on Friday, one day after the Bank of Mexico releases the minutes of its May meeting.
(Reporting by Gabriel Burin in Buenos Aires; Editing by Noe Torres and Kylie Madry)
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