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Rates drop at US Treasury auction with 3-month and 6-month bills declining to November lows

WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction to their lowest levels since November.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.215 per cent, down from 0.260 per cent last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.500 per cent, down from 0.550 per cent last week.

The three-month rate was the lowest since those bills averaged 0.140 per cent on Nov. 23. The six-month rate was the lowest since those bills averaged 0.415 per cent on Nov. 30.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,994.57, while a six-month bill sold for $9,974.72. That would equal an annualized rate of 0.219 per cent for the three-month bills and 0.510 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 0.66 per cent last week from 0.65 per cent the previous week.