Banco de Mexico kept its reference rate at 6.5% in a unanimous August decision, with minutes signaling that further rate holds may be ahead. Headline inflation fell to 3.10% in the first half of July and core inflation eased to 3.95%, but services prices remain elevated, prompting a slower disinflation outlook. The central bank expects headline inflation to reach its 3% target in the fourth quarter of 2027. Most members said economic slack, a relatively strong peso and tight monetary policy should reduce price pressures, while GDP likely grew in the second quarter after contracting in the first, leaving the output gap negative. Inflation risks remain tilted upward because of persistent services inflation, trade-policy uncertainty, Middle East risks to oil and transport costs, and the possibility of stronger El Niño conditions. One member said growth this year could exceed the bank’s 1.1% forecast.