Mexico headline inflation seen easing in June with core rate climbing: Reuters poll

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BUENOS AIRES/MEXICO CITY (Reuters) -Mexican headline inflation likely eased in June after rising for four straight months, though core inflation is expected to have kept climbing, fueling bets the central bank will slow the pace of interest rate cuts, a Reuters poll showed on Tuesday.

The median forecast from 17 analysts projected an annual headline inflation rate of 4.31% for June, down from 4.42% in May, though still above the official target of 3%, plus or minus one percentage point. 

In contrast, core inflation, often seen as a better gauge of price trends because it strips out highly volatile items, was estimated to have accelerated further to 4.22%, its highest level since April of last year.

On a monthly basis, consumer prices were expected to have risen 0.27%, while core prices were forecast to increase by 0.38%, according to the survey. Official data will be released on Wednesday. 

At the end of June, the Bank of Mexico cut its benchmark rate by 50 basis points for a fourth consecutive time, continuing an easing cycle that began in 2024 after rates reached their highest level on record.

However, in its latest statement, the central bank’s board adjusted its forward guidance, dropping previous references to further 50 basis point cuts. Instead, it said it would continue to assess “additional cuts.”

Markets interpreted the change in tone as a signal that the central bank may slow the pace of monetary easing at its next meeting on August 7.

A Citi survey published this week showed consensus among participants for a 25 basis point cut in August.

(Reporting by Gabriel Burin in Buenos Aires; Writing by Noe Torres in Mexico City; Editing by Chizu Nomiyama )