People hoping for more interest rate cuts from the Bank of Canada have been getting some good news.

On Friday the Chair of the U.S. Federal Reserve, Jerome Powell, announced the American central bank is ready to start trimming its policy rate and he hinted several cuts could be coming.

“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data,” he said at the Fed’s annual economic conference in Jackson Hole, Wyoming.

Powell did not say when rate cuts would begin, or how big they will be but it is widely expected there will be a quarter-point drop at the Fed’s next meeting in September.

Reductions in the Fed rate will give the Bank of Canada more room to cut rates here, without fear of overly devaluing the Loonie.  Canada has been leading the U.S. in reducing rates.  There have been concerns that could lower the value of the Canadian dollar, making things more expensive here and rekindling inflation.  Inflation in the U.S. is currently running at 2.5%.

Inflation in Canada took another dip in July falling to 2.5%, down from 2.7% in June.  Food and energy costs were the main drivers of inflation for the month.  Shelter inflation and mortgage interest costs remain high, but they are easing.  Many analysts say that clears the way for another quarter-point cut by the Bank of Canada in September.  There is a broad expectation the Bank will continue making 25 basis-point cuts for the rest of the year.

The BoC’s policy rate currently stands at 4.5%.