Economic analysts conclude that inflation is slowing and will spur positive effects across the economy.

The US economy is cooling off. Inflation is slowing and job openings are rising. Consumers are spending less and borrowing more. While those dynamics might seem worrying at first glance, analysts say they’re signals the economy is moving in the right direction. Analysts say the combination of falling inflation and a loosening labour market bolsters the Federal Reserve’s confidence for an interest rate cut this year. That would end one of the most aggressive policy-tightening cycles in recent history. Lower rates make borrowing cheaper and tend to be a tailwind for both stocks and consumers.

That tightening cycle helped control inflation and brought supply and demand into better balance after the upheaval of the past few years. The question now is whether the economy can coast to a soft landing or if today’s sustainable slowdown will become tomorrow’s recession.

“Things are slowing, and they’re slowing for the right reasons,” says Sameer Samana, senior global market strategist at the Wells Fargo Investment Institute.