The Bank of Canada is widely expected to deliver a third consecutive interest rate cut on Wednesday as inflationary forces continue to cool on both sides of the Canada-United States border.

Markets are also calling for the U.S. Federal Reserve to start its own easing cycle later this month, a move that economists tell Global News will help set its Canadian counterpart up for more rate cuts to come.

Inflation has continued cooling for Canadians amid mild economic growth for much of 2024, allowing the Bank of Canada to start easing its benchmark policy rate from elevated levels in June. But concerns that inflation could reignite in the face of a still-hot economy south of the border were dampened by a particularly downbeat July jobs report in the U.S., cementing expectations that the Fed also needed to start cutting rates soon.