2018

2019

2020

Q1

Q2

Q3

Q4*

Q1F

Q2F

Q3F

Q4F

Q1F

Q2F

Q3F

Q4F

Canada

Overnight Target Rate

1.25

1.50

1.75

2.00

2.25

2.50

3-mth T-Bill Rate

1.10

1.26

1.59

1.66

2.00

2.13

2.25

2.38

2.50

2-yr Govt. Bond Yield

1.77

1.91

2.21

2.06

2.20

2.35

2.45

2.50

2.55

5-yr Govt. Bond Yield

1.96

2.06

2.33

2.07

2.30

2.45

2.55

2.65

2.70

10-yr Govt. Bond Yield

2.09

2.17

2.42

2.12

2.40

2.55

2.70

2.80

2.85

30-yr Govt. Bond Yield

2.23

2.20

2.41

2.27

2.55

2.75

2.95

3.05

3.10

10-yr-2-yr Govt Spread

0.32

0.26

0.21

0.06

0.20

0.25

0.30

U.S.

Fed Funds Target Rate

1.75

2.00

2.25

2.50

2.75

3.00

3-mth T-Bill Rate

1.73

1.93

2.19

2.38

2.53

2.78

2.90

2-yr Govt. Bond Yield

2.27

2.52

2.81

2.77

2.85

2.90

2.95

5-yr Govt. Bond Yield

2.56

2.73

2.94

2.77

2.90

2.95

3.00

10-yr Govt. Bond Yield

2.74

2.85

3.05

2.91

3.05

3.10

3.15

30-yr Govt. Bond Yield

2.97

2.98

3.19

3.15

3.30

3.35

3.40

10-yr-2-yr Govt Spread

0.47

0.33

0.24

0.14

0.20

Canada-U.S. Spreads

Can - U.S. T-Bill Spread

-0.63

-0.67

-0.60

-0.72

-0.53

-0.65

-0.52

-0.40

Can - U.S. 10-Year Bond Spread

-0.65

-0.68

-0.63

-0.79

-0.65

-0.55

-0.45

-0.35

-0.30

F: Forecast by TD Bank Group as at December 2018. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics. * Spot rate as at December 12, 2018 with the exception of policy rates.

Interest Rate Outlook
	2018				2019				2020
	Q1	Q2	Q3	Q4*	Q1F	Q2F	Q3F	Q4F	Q1F	Q2F	Q3F	Q4F
Canada
Overnight Target Rate	1.25	1.25	1.50	1.75	2.00	2.00	2.25	2.25	2.50	2.50	2.50	2.50
3-mth T-Bill Rate	1.10	1.26	1.59	1.66	2.00	2.13	2.25	2.38	2.50	2.50	2.50	2.50
2-yr Govt. Bond Yield	1.77	1.91	2.21	2.06	2.20	2.35	2.45	2.50	2.55	2.55	2.55	2.55
5-yr Govt. Bond Yield	1.96	2.06	2.33	2.07	2.30	2.45	2.55	2.65	2.70	2.70	2.70	2.70
10-yr Govt. Bond Yield	2.09	2.17	2.42	2.12	2.40	2.55	2.70	2.80	2.85	2.85	2.85	2.85
30-yr Govt. Bond Yield	2.23	2.20	2.41	2.27	2.55	2.75	2.95	3.05	3.10	3.10	3.10	3.10
10-yr-2-yr Govt Spread	0.32	0.26	0.21	0.06	0.20	0.20	0.25	0.30	0.30	0.30	0.30	0.30
U.S.
Fed Funds Target Rate	1.75	2.00	2.25	2.50	2.50	2.75	3.00	3.00	3.00	3.00	3.00	3.00
3-mth T-Bill Rate	1.73	1.93	2.19	2.38	2.53	2.78	2.90	2.90	2.90	2.90	2.90	2.90
2-yr Govt. Bond Yield	2.27	2.52	2.81	2.77	2.85	2.90	2.95	2.95	2.95	2.95	2.95	2.95
5-yr Govt. Bond Yield	2.56	2.73	2.94	2.77	2.90	2.95	3.00	3.00	3.00	3.00	3.00	3.00
10-yr Govt. Bond Yield	2.74	2.85	3.05	2.91	3.05	3.10	3.15	3.15	3.15	3.15	3.15	3.15
30-yr Govt. Bond Yield	2.97	2.98	3.19	3.15	3.30	3.35	3.40	3.40	3.40	3.40	3.40	3.40
10-yr-2-yr Govt Spread	0.47	0.33	0.24	0.14	0.20	0.20	0.20	0.20	0.20	0.20	0.20	0.20
Canada-U.S. Spreads
Can - U.S. T-Bill Spread	-0.63	-0.67	-0.60	-0.72	-0.53	-0.65	-0.65	-0.52	-0.40	-0.40	-0.40	-0.40
Can - U.S. 10-Year Bond Spread	-0.65	-0.68	-0.63	-0.79	-0.65	-0.55	-0.45	-0.35	-0.30	-0.30	-0.30	-0.30
F: Forecast by TD Bank Group as at December 2018. All forecasts are end-of-period. Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics. * Spot rate as at December 12, 2018 with the exception of policy rates.