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Rates mixed at US Treasury auction with 6-month bills dropping to lowest since early 2012

Interest rates on short-term Treasury bills were mixed in Monday’s auction with rates on six-month bills falling to the lowest point since early 2012.

The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.045 per cent, unchanged from last week. Another $25 billion in six-month bills was auctioned at a discount rate of 0.075 per cent, down from 0.080 per cent last week.The six-month rate was the lowest since these bills averaged 0.070 per cent on Jan. 23, 2012.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.86 while a six-month bill sold for $9,996.21. That would equal an annualized rate of 0.046 per cent for the three-month bills and 0.076 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, was unchanged last week at 0.14 per cent, the same as the previous week.