(Bloomberg) – Banco de México unexpectedly raised its key rate for the first time since 2018 amid fears that high inflation could threaten the rebound in the economy. The increase of a quarter of a point to 4.25% responded to a rise in inflation that was believed to be temporary. Economists surveyed by Bloomberg expected the bank to keep the rate at 4%. Banxico’s inflation target is 3%, plus or minus one percentage point. Traders are now betting more aggressive increases are ahead, with the first rise of a quarter point in August.
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