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Rates mixed at weekly US Treasury auction

WASHINGTON – Interest rates on short-term Treasury bills were mixed in Monday’s auction, with rates on three-month bills falling, while rates on six-month bills rose to their highest point since late May.

The Treasury Department auctioned $40 billion in three-month bills at a discount rate of 0.300 per cent, down from 0.305 per cent last week. Another $34 billion in six-month bills was auctioned at a discount rate of 0.445 per cent, up from 0.440 per cent last week.

The three-month rate was the lowest since those bills averaged 0.285 per cent two weeks ago on Aug. 1. The six-month rate was the highest since these bills averaged 0.475 per cent on May. 31.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.42, while a six-month bill sold for $9,977.50. That would equal an annualized rate of 0.304 per cent for the three-month bills and 0.452 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 0.56 per cent last week from 0.52 per cent the previous week.