Interest Rate Outlook

Interest Rates

2020

2021

2022

Q1

Q2

Q3

Q4

Q1F

Q2F

Q3F

Q4F

Q1F

Q2F

Q3F

Q4F

Canada

Overnight Target Rate

0.25

3-mth T-Bill Rate

0.21

0.20

0.12

0.06

0.13

0.15

0.18

0.20

2-yr Govt. Bond Yield

0.42

0.28

0.25

0.20

0.30

0.35

0.40

0.45

0.55

5-yr Govt. Bond Yield

0.60

0.36

0.39

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

10-yr Govt. Bond Yield

0.71

0.52

0.57

0.67

1.50

1.55

1.60

1.65

1.70

1.75

1.80

1.85

30-yr Govt. Bond Yield

1.30

0.99

1.11

1.21

1.90

1.95

2.00

2.05

2.10

2.15

2.20

2.25

10-yr-2-yr Govt Spread

0.29

0.31

0.32

0.47

1.20

1.25

1.30

1.35

1.30

U.S.

Fed Funds Target Rate

0.25

3-mth T-Bill Rate

0.11

0.16

0.10

0.09

0.05

0.08

0.10

2-yr Govt. Bond Yield

0.23

0.16

0.13

0.15

0.18

0.20

0.25

0.30

0.35

0.45

0.55

5-yr Govt. Bond Yield

0.37

0.29

0.28

0.36

0.80

0.85

0.90

0.95

1.05

1.15

1.25

1.30

10-yr Govt. Bond Yield

0.70

0.66

0.69

0.93

1.55

1.60

1.65

1.70

1.75

1.80

1.85

1.90

30-yr Govt. Bond Yield

1.35

1.41

1.46

1.65

2.25

2.30

2.35

2.40

2.45

2.50

10-yr-2-yr Govt Spread

0.47

0.36

0.56

0.80

1.40

1.42

1.45

1.40

1.35

Canada-U.S. Spreads

Can - U.S. T-Bill Spread

0.10

0.04

0.02

-0.03

0.08

0.07

0.08

0.10

Can - U.S. 10-Year Bond Spread

0.01

-0.14

-0.12

-0.26

-0.05

F: Forecast by TD Economics as at March 2021. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics.