Mexico’s Inflation Tops Target Range, Testing Rate Cut Plans

Mexico’s annual inflation accelerated more than expected in May and breached the top of the target range, challenging expectations that the central bank will keep its half-point pace of interest rate cuts this month.

Annual inflation sped up to 4.42% last month, above the 4.38% median estimate of economists surveyed by Bloomberg and higher than April’s 3.93% print. The core reading, which excludes volatile items such as food and fuel, rose to 4.06% from 3.93% a month prior, the national statistics agency reported on Monday. The central bank targets inflation at 3%, plus or minus one percentage point.