Domestic prices for goods and other services remained almost unchanged compared to October. The observed pressures in both the underlying and non-underlying components challenge the central bank's forecasts, which are currently facing a credibility crisis. The bank projects that inflation will reach 3% by the end of 2026. Ahead of the last Banco de México (Banxico) meeting of the year amid a debate over its credibility, inflation showed a slightly higher-than-estimated rise in November, reaching 3.8% from the 3.57% reported in the previous reading. According to data published by INEGI on Tuesday morning, the greatest pressures come from underlying inflation, which remains above the central bank's target range at 4.473% during the second-to-last month of the year. The most significant pressures, above 5% annually, were seen in prices for school tuition and other food-related services like cafeterias, fondas, and restaurants, as well as in telecommunications, auto maintenance, and medical consultations. It is worth remembering that the underlying indicator is a benchmark for medium and long-term inflationary behavior due to the influence of monetary policy on it. Meanwhile, non-underlying inflation stood at 1.73%, with a reduction of up to 7.8% in the fruits and vegetables category. Banamex states that inflation has become a structural problem: 'There are no conditions to reach 3%.' On a monthly comparison, inflation stood at 0.66%. In this regard, pressures in the non-underlying component, which advanced by 2.28%, were greater, as energy prices rose by up to 3.90%, and pressures were also seen in fruits and vegetables. As for the underlying component, it stood at 0.19%. However, the persistence in components such as goods or services casts doubt on this scenario. In this sense, the market reinforces the projection that the team led by Victoria Rodríguez will opt for a pause in the interest rate cut cycle, with the last one this December in its meeting next week, closing the year with a rate of 7%.
