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Hawkish Turn Raises Bar For Incoming Governor in 2022

MEXICO
  • The statement cites that the “Federal Reserve announced an acceleration of the removal of monetary stimulus” – potentially this added weight to the decision.
    • "The Governing Board evaluated the magnitude and diversity of the shocks that have affected inflation and the factors that determine it, along with the risk of price formation becoming contaminated, and the challenges posed by the ongoing tightening of monetary and financial global conditions.”
  • Key bit here – the monetary policy stance adjusts to the require trajectory:
    • “Based on these considerations, on this occasion, the Board decided to increase the target for the overnight interbank interest rate by 50 basis points to 5.5%. With this action, the monetary policy stance adjusts to the trajectory required for inflation to converge to its 3% target within the forecast horizon.”
  • Certainly raises the bar for the incoming Governor, Ms. Rodriguez in 2022.
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