Exploring the drivers of the real term premium in Canada

Staff Analytical Note 2025-3 (English)
Zabi Tarshi, Gitanjali Kumar
February 2025
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Changes in the term premium can reflect uncertainty about inflation, growth and monetary policy. Understanding the key factors that influence the term premium is important when central banks make decisions about monetary policy. In this paper, we derive the real term premium from the nominal term premium in Canada.

Content Type(s): Staff research, Staff analytical notes
Topic(s): Econometric and statistical methods, Financial markets, Interest rates, Monetary policy and uncertainty
JEL Code(s): C, C5, C58, E, E4, E43, E47, G, G1, G12

DOI: https://doi.org/10.34989/san-2025-3