U.S. tariffs could exert strain on each ends of inflation

MEXICO CITY (Reuters) – A lot of the Financial institution of Mexico’s 5 governing board members agreed that the dangers related to U.S. President Donald Trump’s tariffs will exert each upward and downward pressures on Mexican inflation.

“They identified that, on the one hand, there’s a higher risk of an additional trade fee depreciation and, on the opposite, a higher threat of an additional financial weakening,” stated the Mexican central financial institution on Thursday in minutes of its final financial coverage assembly.

Banxico, because the financial institution is thought, delivered a unanimous 50-basis-point rate of interest minimize to 9.00% on March 27, highlighting progress on inflation however warning of heightened uncertainty regarding commerce tensions and a weakening economic system.

Some board members talked about that weak spot within the Mexican financial exercise “is anticipated to have deepened within the first quarter of 2025,” stated the minutes.

A primary-quarter contraction would mark a technical recession, after the economic system shrunk within the fourth quarter – its first quarterly contraction for the reason that pandemic.

One board member underscored that the results of the uncertainty ensuing from U.S. tariffs have been already mirrored in a further weakening of the Mexican economic system, in response to the minutes.

(Reporting by Anthony Esposito and Rafael Escalera Montoto; Modifying by Stefanie Eschenbacher)