Banxico kept its benchmark interest rate unchanged at 6.50% during its June 2026 meeting, in line with expectations. It was noted that the economy is expected to rebound in the second quarter, although significant downside risks to activity remain. Inflation continued to ease between April and mid-June, with headline inflation down from 4.45% to 3.55%, while core inflation eased from 4.26% to 4.12%. Banxico revised down its headline inflation forecasts for the second quarter due to softer non-core prices, while slightly raising its core inflation outlook through the end of 2026. Banxico maintained its projection for headline inflation to converge to the 3% target in the second quarter of 2027. Policymakers said the balance of risks remains tilted to the upside, citing trade disruptions, geopolitical tensions, persistent core inflation, climate-related shocks, and possible peso depreciation. Banxico signaled that it will likely be keeping the policy rate at its current level.