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Rates on US Treasury bills drop at weekly auction to lowest levels in 3 weeks

WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction to the lowest levels in three weeks.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.250 per cent, down from 0.280 per cent last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.515 per cent, down from 0.585 per cent last week.

The three-month rate was the lowest since these bills averaged 0.215 per cent three weeks ago on Nov. 30. The six-month rate was the lowest since these bills averaged 0.415 per cent, also on Nov. 30.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,993.68 while a six-month bill sold for $9,973.96. That would equal an annualized rate of 0.254 per cent for the three-month bills and 0.525 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, fell to 0.69 per cent last week from 0.71 per cent the previous week.