Analysts and economists are predicting that the Bank of Canada will introduce its third summer interest-rate cut on Wednesday.

The BoC is expected to introduce another 25-basis-point cut after reducing the overnight lending rate by a total of 50 bps in July and June. Those cuts resulted after an extended period of holds and hikes designed to reduce inflation.

Tiff Macklem, the BoC’s governor, has softened his stance on hikes considerably and signalled in recent weeks that the central bank remains in reduction mode.

The U.S. Federal Reserves signs of a September cut, which would ease concerns about a divergence and Canadian monetary policies, have also led to more economist and analyst expectations of another BoC reductions.

In a research note provided to Connect, Toronto-Dominion Bank Economist Maria Solovieva said last week’s Canadian economic data supports the BoC’s bias towards monetary easing. Her report’s headline said Canada has “more reason to ride down the policy escalator, referring to more rate cuts.

“With the Fed now poised to adopt a similar policy stance, the risk of significant monetary policy divergence has diminished, reducing downward pressure on the Canadian dollar and easing the risk of importing price inflation,” she wrote.

According to reports, Bank of Montreal Economist Benjamin Reitzes and Andrew Grantham, a CIBC senior economist, have expressed similar views in client notes.

Meanwhile, analysts surveyed by Bloomberg expect a 25-bps cut at each of the next five BoC policy meetings, the news agency reported.

“We know the economy is weakening persistently and they’ve got to do something at this point to get rates down,” Claire Fan, an economist with the Royal Bank of Canada, told Bloomberg.

“There’s simply no need for rates to be as elevated as they are.”

Pictured: Bank of Canada Governor Tiff Macklem