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Canada 2-year yield hits two-year high after BoC rate hike
Reuters reports Canadian government bond yields rose Wednesday after the Bank of Canada raised its policy rate by 25 basis points to 2.50%, the first increase in more than three years.
- New headline Was: “Canadian 2-year yield hits two-year high as BoC hikes interest rates”
- Our desk filed its story
Based on reporting by Reuters
Canadian government bond yields rose on Wednesday after the Bank of Canada raised its policy interest rate by 25 basis points to 2.50%, the first increase in more than three years, Reuters reported from Toronto1.
Reuters said the central bank indicated further increases might be needed to keep higher energy costs from feeding into broader inflation, and that the Canadian dollar edged higher against the U.S. dollar1.
According to Reuters, the two-year Canada yield rose as much as 7.2 basis points to 3.441%, a level last seen in August 2024, before easing to 3.413%, while the 10-year yield was up 2.4 basis points at 3.885%1.
Swap markets priced a 45% chance of another hike in December and fully priced a second increase by January, Reuters said, citing TD Securities strategists as arguing the bank often moves consecutively after a long pause1.