WASHINGTON – Interest rates on short-term Treasury bills rose in Monday’s auction to the highest levels since late August.
The Treasury Department auctioned $35 billion in three-month bills at a discount rate of 0.035 per cent, up from 0.010 per cent last week. Another $30 billion in six-month bills was auctioned at a discount rate of 0.060 per cent, up from 0.040 per cent last week.
The three-month rate was the highest since three-month bills averaged 0.040 per cent on Aug. 26. The six-month rate was the highest since these bills averaged 0.065 per cent, also on Aug. 26.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.12 while a six-month bill sold for $9,996,97. That would equal an annualized rate of 0.035 per cent for the three-month bills and 0.061 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 0.11 per cent last week from 0.10 per cent the previous week.