Rates fall at US Treasury bill auction with 6-month rate dropping to lowest since October

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WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction, with rates on six-month bills dropping to the lowest level since October.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.055 per cent, down from 0.065 per cent last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.080 per cent, down from 0.090 per cent last week.

The three-month rate was the lowest since three-month bills averaged 0.050 per cent on Nov. 4. The six-month rate was the lowest since these bills averaged 0.070 per cent on Oct. 21.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.61 while a six-month bill sold for $9,995.96. That would equal an annualized rate of 0.056 per cent for the three-month bills and 0.081 per cent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was 0.13 per cent last week, unchanged from the previous week.

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