Rates mixed at US Treasury auction with 3-month bills down to lowest level since late 2011

WASHINGTON – Interest rates on short-term Treasury bills were mixed in Tuesday’s auction with rates on six-month bills unchanged while rates on three-month bills fell to the lowest level since late 2011.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.010 per cent, down from 0.015 per cent last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.040 per cent, unchanged from last week.

The three-month rate was the lowest since these bills averaged 0.005 per cent on Dec. 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 $9,999.75 while a six-month bill sold for $9,997.98. That would equal an annualized rate of 0.010 per cent for the three-month bills and 0.041 per cent for the six-month bills.

The weekly auction of three-month and six-month bills, normally held on Monday, was held on Tuesday this week because of the Columbus Day holiday.

Separately, the Federal Reserve said Tuesday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged down to 0.10 per cent last week from 0.11 per cent the previous week.