Mexico’s consumer prices are rising at a phenomenal pace and might not peak until the end of 2021 or early 2022, requiring an appropriate response by policy makers, central bank deputy Governor Jonathan Heath said, Bloomberg News reported. Both internal and external supply shocks have led to an upward inflation trend, leaving no room for expansive monetary policy, Heath, one of the five Banco de Mexico board members, said on a Grupo Financiero Banorte podcast released Wednesday. “It’s easy to see that prices are increasing, and they’re being transferred to consumer prices at a pace that’s really phenomenal,” he said. The central bank has hiked its key interest rate a quarter point at each of its last three meetings, generating expectations that borrowing costs will hit 5.25% by year-end from the current 4.75%, according to economists surveyed by Citigroup Inc.’s local Citibanamex unit. Banxico is one of many central banks across Latin America that are tightening monetary policy in response to quickening inflation, as economies open back up. Though many of the supply shocks are external, domestic factors, such as flooding, climate change, and blockades along train lines, have also contributed to the price shifts, Heath said. The central bank’s concern that increases in one sector of the economy would pressure prices higher elsewhere has already been observed, he added. “If we look at core inflation, we can reach the conclusion that these increases are already generalized,” Heath said. Read more.