The Bank of Mexico held its benchmark interest rate steady at 7.00% during its meeting on February 5, 2026, marking an end to the recent easing cycle while maintaining the rate at its lowest since May 2022. This decision halts the series of rate cuts initiated in March of the previous year. Economic activity in Mexico demonstrated growth in the fourth quarter of 2025, bouncing back from a contraction in the third quarter. However, the Board cautioned that risks, such as escalating trade tensions and global economic instability, continue to pose challenges. The decision to maintain the current rate was reached unanimously by the Board, which deemed a pause fitting in light of the present inflation outlook and the necessity to evaluate the impact of previous policy adjustments. Headline inflation showed a slight decline to 3.77% in mid-January from 3.80% in November, whereas core inflation edged up to 4.47% from 4.43%, remaining stubbornly above the 4% mark. Despite these short-term inflationary pressures, the Bank of Mexico now anticipates that inflation will align with its 3% target by the second quarter of 2027.