The Federal Reserve of the United States, despite having a triple mandate that includes inflation, unemployment, and interest rates, has come to the conclusion that prices are paramount within its jurisdiction. In contrast, within the Board of Governors, there appears to be a minority member who is clear about this objective. It is also highlighted that the Bank of Mexico has a unique mandate to maintain low and stable inflation, as evidenced in the minutes of its recent meeting.
In that meeting, the Board of Governors showed optimism in achieving this objective, although it has historically been difficult to reach since its inception in the last century. Despite inflation returning to its historical average, some members seem to be satisfied with this level, proposing it as a new target. Although low inflation is a necessary condition for high economic growth, it is not sufficient.
Some believe in the idea of a "dual mandate" that balances GDP growth and inflation. However, this raises questions about why it was not established this way when autonomy was granted to the Bank of Mexico in 1994. Currently, lowering interest rates seems to be the Central Bank's priority, regardless of the actions of leaders such as Trump.
The importance of maintaining low inflation is emphasized, as it contributes to moderate interest rates and generates confidence for investment. Despite the clear current economic slowdown, it is highlighted that the focus on inflation should not be lost, as it is fundamental for economic stability. Sustained economic growth and price control are essential goals for a central bank, and in the case of Banxico, its future success will be measured by its ability to achieve these objectives.
