Half a point from the Fed, half a point from Banxico?

The half percentage point that the United States Federal Reserve raised yesterday to its reference interest rate should be the guideline for what the Banco de México Governing Board will have to announce today regarding the increase in its overnight interbank rate.

It is not that the central bank of the United States should be the guide of the Mexican bank, but it is clear that both economies are still facing significant inflationary pressures and this is not the time to try to disassociate themselves from the most important financial market in the world.

Even, the Mexican inflationary conditions would still give some margin so that another 75 basis points could be raised today with full justification.

Obviously, from the financial markets they would like to see that this party of yields that have led to obtaining prizes that are well covered by country risk does not end.

The reference interest rate in Mexico at 10%, plus today’s increase, is already beginning to hinder growth possibilities, but Banxico has a single goal, which is to avoid high inflation.

Our country, unlike the United States, cannot boast of having reached a ceiling in core inflation. Just last fortnight the increase curve flattened a bit without it being possible to guarantee that the price contagion had ended.

The most volatile prices have given general inflation a truce, but it is precisely those non-core prices that are so unstable that their permanence in the most stable grounds cannot be guaranteed.

In Mexico we enjoyed very little from the drop in energy prices. In fact, gasoline in the United States has dropped very drastically, yesterday the average for a liter of Regular gasoline in that country was 15.70 pesos. And if we look at the price of Texas, from where gasoline is imported to Mexico, it was 13.10 pesos.

On this side of the border, the drop has helped the Tax Administration Service to recover most of the collection of the Special Tax on Production and Services, but consumers continue to pay the same as at the worst moment of the rise in those prices. Someone is getting that benefit.

So, oil prices have given that truce enjoyed by economies that do not have the state controls that Mexico has, but the threats that those prices will skyrocket again are intact.

To begin with, the war over Russia’s invasion of Ukraine remains unchanged and the price barrier imposed by the West on Russian oil may cause a speculative wave to break out again next year.

In short, the pressures for inflation are far from over, but for now this synchronized swimming of less drastic increases or even pauses in the increases in the rates of Mexico and the United States is something that does not affect Mexican sovereignty and that Yes, it can allow inflationary pressures not to add exchange pressures, for example.

ecampos@eleconomista.mx