Rates on US Treasury bills rise at auction with 6-month bills climbing to highest in 14 months

WASHINGTON – Interest rates on short-term Treasury bills rose in Monday’s auction with rates on six-month bills climbing to the highest level in 14 months.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.035 per cent, up from 0.025 per cent last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.110 per cent, up from 0.090 per cent last week.

The three-month rate was the highest since these bills averaged 0.040 per cent on June 30. The six-month rate was the highest since these bills averaged 0.150 per cent on Oct. 15, 2013.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.12 while a six-month bill sold for $9,994.44. That would equal an annualized rate of 0.035 per cent for the three-month bills and 0.112 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 0.20 per cent last week from 0.15 per cent the previous week.