The Bank of Canada is expected to reduce interest rates for the second consecutive meeting in an effort to avoid a recession and manage inflation. Governor Tiff Macklem has indicated that a soft landing—a gradual slowdown that tempers price pressures without causing widespread job losses—is on the horizon.

Last month, the Bank of Canada became the first among the Group of Seven central banks to lower borrowing costs. Economists and market analysts anticipate another rate cut on Wednesday, reducing the key policy rate from 4.75% to 4.5%.

Recent quarterly business and consumer surveys from the bank revealed subdued inflation expectations and a return to more typical pricing behaviors among firms. This data supports the Bank of Canada’s strategy to gently ease economic pressures without triggering a spike in inflation.

Governor Macklem’s approach aims to balance economic stability with controlled inflation, navigating through uncertain economic conditions while preserving employment levels. This anticipated move underscores the bank’s commitment to carefully steering the economy towards sustainable growth.