WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction with rates on three-month bills dropping to the lowest point since last October.
The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.015 per cent, down from 0.020 per cent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.070 per cent, down from 0.095 per cent last week.
The three-month rate was the lowest since three-month bills averaged 0.010 per cent on Oct. 14. The six-month rate was the lowest since six-month bills averaged 0.065 per cent on Feb. 23.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.62 while a six-month bill sold for $9,996.46. That would equal an annualized rate of 0.015 per cent for the three-month bills and 0.071 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 0.25 per cent last week from 0.24 per cent the previous week.