08:12 AM EDT, 09/05/2024 (MT Newswires) -- As expected, the Bank of Canada (BoC) cut interest rates again on Wednesday by 25 basis points to 4.25%, said Commerzbank.

This means that it has now cut rates at the last three meetings. At the same time, it was clear between the lines that further rate cuts are likely at upcoming meetings, wrote the bank in a note to clients.

BoC Governor Tiff Macklem emphasized in his opening remarks that further rate cuts can be expected as long as inflation continues to moderate as expected.

At the same time, the BoC now wants to see growth pick up. The surprisingly strong growth figures in Q2 didn't change this, as they were mainly driven by government spending and investment, with little contribution from private consumption, stated Commerzbank.

In short, unless inflation picks up unexpectedly in the coming months, the BoC is likely to cut rates further. The bank's baseline scenario remains a rate cut of 25 basis points at each of the two remaining meetings this year.