WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction with rates on six-month bills dropping to the lowest level in nearly two years.
The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.020 per cent, down from 0.030 per cent last week. Another $25 billion in six-month bills was auctioned at a discount rate of 0.035 per cent, down from 0.055 per cent last week.
The three-month rate was the lowest since three-month bills averaged 0.010 per cent on Jan. 9, 2012. The six-month rate was the lowest since those bills averaged 0.030 per cent on Sept. 19, 2011.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.49, while a six-month bill sold for $9,998.23. That would equal an annualized rate of 0.020 per cent for the three-month bills and 0.035 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, edged up to 0.15 per cent last week from 0.13 per cent the previous week.