Financial experts are expecting the Bank of Canada to adopt a more ‘dovish’ tone on future interest hikes when it makes its latest rate announcement — the final one of the year — on Wednesday morning.According to financial services advisory firm, Finder.com, 93% of economists and industry experts expect the bank to maintain its key overnight rate at 5%. And in a change of tone, the main naysayers are expecting rates to go down a quarter of a percentage point, not up.Although inflation remains well above the bank’s 2% target rate, at 3.1% in October, it’s on enough of a downward trend to maintain confidence that previous rate hikes — which are now at a 20-year high — are beginning to take hold..As Sebastian Lavoie, Chief Economist of Laurentian Bank explains: "The Canadian economy is at a stagnation point with quasi-full employment (levels). The behaviour of companies, consumers and workers is not completely back to normal, but progress has been made sufficiently to bring CPI inflation closer to a comfortable zone." "The elevated policy rate level works and for now, it is preferable to keep it that way rather than bring an overdose of tightness."That “overdose of tightness” is techno-speak for even higher mortgage and credit card rates and the possibility of a full-blown recession.That same sentiment is what prompted Atif Kubusri, president of the Economic Research Forum, to predict a 0.25% cut when the bank meets on Wednesday.“The economy is softening and the Bank of Canada should focus on making sure the economy does not fall into a recession — a recession that will feed economic fears and increase the difficulty of an economic turnaround,” he wrote..The central bank doesn’t set monetary policy; however, it works with the federal government to establish monetary policy and the primary tool the overnight target rate. By adjusting that rate, the bank has an almost immediate impact on all variable-rate credit instruments, including lines of credit, personal loans, credit cards, mortgage rates and interest earned on savings accounts.Even though interest rates are at their highest level in more than 20 years, they’ve averaged about 5.8% since 1990, after topping out around 16% in 1991..Typically, banks pass on rate increases to credit faster than rate increases to savings products. In that regard, the federal government on Tuesday announced agreements with Visa and Mastercard to lower credit card transaction fees for small businesses and protect rewards points to consumers offered by large banks.Under the terms, consumer credit interchange fees for in-store transactions to an annual weighted average rate of 0.95% which is expected to save businesses that accept credit card payments about $1 billion over five years.For example, a small local sport store in Edmonton that has $300,000 in annual credit card sales ($200,000 in Visa sales and $100,000 in Mastercard sales) pays about $4,000 in interchange fees on credit card transactions every year. Because of the new agreements, they are expected to see interchange savings of 27%, or $1,080 annually.Non-profit organizations with transaction volumes below thresholds of $175,000 per year will also benefit from reduced rates. The new rates will come into effect in the fall of 2024.“Reducing costs on small businesses will enable them to further invest in their business and its growth, while helping support their success now and into the future,” Small Business Minister Rechie Valdez said in a statement.