Overview
- INEGI reported headline inflation at 3.8% year over year in November, up from 3.57% in October, with increases led by electricity, public transport and select produce such as tomatoes.
- Core inflation accelerated to 4.43% annually, its highest since early 2024, with services up 4.49% and goods at 4.37%, underscoring persistent domestic cost pressures.
- Subgovernor Galia Borja warned that limited tax hikes, trade risks tied to tariffs and the 2026 T‑MEC review, and a possible rebound in non-core prices argue for a firmer policy stance.
- Analysts at Citi and Banamex expect inflation to stay above 4% into early 2026, citing the 13% minimum‑wage increase and IEPS adjustments, with Banamex projecting around 4.5% in the first months of the year.
- Despite a ninth straight slowdown in producer prices to 2.36% y/y, markets have lifted longer‑term yields and pared bets on aggressive 2026 rate cuts; Banxico’s rate stands at 7.25% with the next decision on Dec. 18 and some desks still calling for a 25 bp cut.