Overall inflation stood at 3.69% in the first half of January 2025, a figure not seen since early 2021. Meanwhile, core inflation was at 3.72%, close to its average value between 2003 and 2019, when the permanent target of 3% was defined. Medium and long-term inflation expectations remained stable, but still above the target.
Inflation forecasts remain similar to those from the previous meeting, with an expectation that overall inflation will converge to the 3% target in the third quarter of 2026. The Board assessed that this adjustment is appropriate given the current inflationary outlook and the challenges of the phase in which the economy is currently in.
Regarding the global economy, growth during the fourth quarter of 2024 was estimated to be slightly lower than that recorded so far this year. The economy of the United States continues to stand out for its strength, while the global disinflation process advanced. However, trade tensions increased, especially with the imposition of tariffs on imports from China, Mexico, and Canada.
The Governing Board of the Bank of Mexico decided to reduce the interbank interest rate for one day by 50 basis points, bringing it to a level of 9.50%, effective from February 7, 2025. Monetary policy must continue with the aim of reducing inflation to the target of 3%. In this context, the decision was made to reduce the reference rate by 50 basis points, setting it at 9.50%.
In Mexico, interest rates on government securities decreased across all terms, while the Mexican peso displayed fluctuating behavior, without showing a clear trend. National economic activity suffered a contraction in the fourth quarter, and employment also showed signs of slowdown. The balance of risks for economic activity remains biased to the downside.
The decision was approved by majority, with Victoria Rodríguez Ceja, Galia Borja Gómez, José Gabriel Cuadra García, and Omar Mejía Castelazo voting in favor of the 50 basis point reduction. Jonathan Heath voted for a 25 basis point reduction, leaving the rate at 9.75%.
