(Bloomberg) -- Mexican central bankers see sticky services price inflation and a strong jobs market as reasons to cut interest rates only cautiously.  

At least one board member discounted another cut over the next meetings if core inflation data don’t improve, according to the minutes of the bank’s May meeting published Thursday. 

Others argued that further cuts should be considered but must be “gradual.”

The bank, known as Banxico, held its key interest rate at 11% at its May meeting, following a cut of a quarter percentage point in March.

Inflation has slowed considerably since its peak in 2022, but remains above its 3% target. Consumer price rises accelerated slightly to 4.78% in the first two weeks of May according to data released earlier on Thursday. 

Inflation Forecast 

The bank lifted its inflation forecast for six quarters in its last decision. Banxico is now expecting to hit its inflation goal in the last quarter of 2025, as strong domestic demand keeps core inflation elevated. 

Bank Governor Victoria Rodriguez has said that there’s more room for easing but that it will make decisions based on available information, creating the expectation among analysts that the board may cut rates again in June.

Economists in the latest Citi survey are predicting a quarter point cut next month. 

--With assistance from Robert Jameson.

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