The premium measures how far two-year yields sit above each central bank's policy rate, so a larger premium means the bond market expects tighter policy. Canada's premium has been larger than the US premium on every session in the period, though the gap has narrowed. The premium is linked to oil and has faded as Brent eased. The step in the US line on September 16 is the Federal Reserve rate increase itself, not a market move.
This chart is presented for general informational purposes only and does not constitute financial, investment, tax, or legal advice. Figures reflect the source and period indicated and may no longer be current.
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