2-Year and 10-Year Government Bonds

The Government of Canada issues bonds across many maturities. This site focuses on the 2-year and 10-year bonds specifically, because the gap between their yields (the '10y-2y spread') is one of the most closely watched signals in fixed income.

The 2-year yield mostly reflects near-term expectations for the Bank of Canada's policy rate. The 10-year yield reflects longer-run expectations for growth and inflation. When the 2-year yield rises above the 10-year — an inversion — it usually means markets expect rate cuts ahead, often because they expect a slowdown.