Let me start with a brief overview of the recent history of long-term interest rates in some key economies. Chart 1 shows the 10-year government bond yields for five major industrial countries: Canada, Germany, Japan, the United Kingdom, and the United States.
Note that the movements in these yields are quite correlated despite some differences in the economic circumstances and central bank mandates in those countries. Further, with the notable exception of Japan, the levels of the yields have been very similar – indeed, strikingly so, with long-term yields declining over time and currently close to 2 percent in each case.