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Rates fall at weekly US Treasury auction

WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction with rates on three-month bills dropping to their lowest level in three weeks.

The Treasury Department auctioned $37 billion in three-month bills at a discount rate of 0.315 per cent, down from 0.325 per cent last week. Another $30 billion in six-month bills was auctioned at a discount rate of 0.475 per cent, down from 0.480 per cent last week.

The three-month rate was the lowest since those bills averaged 0.300 per cent three weeks ago on Feb. 16. The six-month rate was the lowest since those bills averaged 0.455 per cent on Feb. 22.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.04, while a six-month bill sold for $9,975.99. That would equal an annualized rate of 0.320 per cent for the three-month bills and 0.483 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, rose to 0.66 per cent last week from 0.56 per cent the previous week.