Consistent Earnings Growth and Digital Engagement
Interest Rate Outlook 111
7
Interest Rates, Canada and U.S.
%
U.S. Federal
6
Funds Rate
5
3
2
Bank of
Canada
Overnight
Policy Rate
0
2000 2002 2005
2008
2011 2013
2016 2019
TD
Forecast
2022 2024
■ The Federal Reserve raised the
federal funds rate target to the 3.75%
to 4.00% range in November. We
expect a 50-bps rate hike in
December and two additional 25 bps.
hikes in 2023. This will bring the
federal funds rate to a peak 5.00% in
2023.
■ The Bank of Canada (BoC) also
raised the overnight rate in October to
3.75%. We expect the BoC to hike the
policy rate another 50 bps before the
end of 2022, and 25 bps in early next
year bringing the rate to a peak 4.50%
in 2023.
The Federal Reserve and the Bank of
Canada are expected to reach policy
rates of 5.00% and 4.50% in 2023,
respectively.
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