Interest Rate Outlook
Interest Rates 2021 2022 2023
Q1 Q2 Q3 Q4 Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Canada                        
Overnight Target Rate  0.25 0.25 0.25 0.25 0.50 1.25 1.50 1.75 2.00 2.00 2.00 2.00
3-mth T-Bill Rate  0.09 0.15 0.12 0.16 0.78 1.38 1.63 1.88 2.00 2.00 2.00 2.00
2-yr Govt. Bond Yield  0.22 0.45 0.53 0.95 1.80 1.95 2.00 2.00 2.00 1.95 1.95 1.90
5-yr Govt. Bond Yield  0.99 0.97 1.11 1.25 1.95 2.05 2.15 2.20 2.20 2.15 2.10 2.05
10-yr Govt. Bond Yield  1.55 1.39 1.51 1.42 2.10 2.15 2.30 2.35 2.35 2.30 2.25 2.20
30-yr Govt. Bond Yield  1.98 1.84 1.99 1.68 2.40 2.45 2.60 2.65 2.65 2.60 2.55 2.50
10-yr-2-yr Govt Spread 1.33 0.94 0.98 0.47 0.30 0.20 0.30 0.35 0.35 0.35 0.30 0.30
U.S.                         
Fed Funds Target Rate  0.25 0.25 0.25 0.25 0.50 1.25 1.50 1.75 2.00 2.25 2.25 2.25
3-mth T-Bill Rate  0.03 0.05 0.04 0.06 0.80 1.30 1.55 1.75 2.00 2.15 2.15 2.15
2-yr Govt. Bond Yield  0.16 0.25 0.28 0.73 1.80 1.95 2.00 2.05 2.05 2.05 2.00 2.00
5-yr Govt. Bond Yield  0.92 0.87 0.98 1.26 2.00 2.10 2.20 2.25 2.30 2.25 2.20 2.15
10-yr Govt. Bond Yield  1.74 1.45 1.52 1.52 2.15 2.25 2.35 2.40 2.45 2.40 2.35 2.30
30-yr Govt. Bond Yield  2.41 2.06 2.08 1.90 2.45 2.55 2.65 2.70 2.75 2.70 2.65 2.60
10-yr-2-yr Govt Spread 1.58 1.20 1.24 0.79 0.35 0.30 0.35 0.35 0.40 0.35 0.35 0.30
Canada-U.S. Spreads              
Can - U.S. T-Bill Spread 0.06 0.10 0.08 0.10 -0.02 0.08 0.08 0.13 0.00 -0.15 -0.15 -0.15
Can - U.S. 10-Year Bond Spread -0.19 -0.06 -0.01 -0.10 -0.05 -0.10 -0.05 -0.05 -0.10 -0.10 -0.10 -0.10
F: Forecast by TD Economics as at March 2022. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics.