Rates on US Treasury bills rise at weekly auction

WASHINGTON – Interest rates on short-term Treasury bills rose in Monday’s auction, with three-month bills rising to their highest level in three weeks.

The Treasury Department auctioned $42 billion in three-month bills at a discount rate of 0.310 per cent, up from 0.250 per cent last week. Another $36 billion in six-month bills was auctioned at a discount rate of 0.490 per cent, up from 0.420 per cent last week.

The three-month rate was the highest since three-month bills averaged 0.375 per cent three weeks ago on Sept. 12. The six-month rate was the highest since those bills averaged 0.500 per cent on Sept. 19.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.16, while a six-month bill sold for $9,975.23. That would equal an annualized rate of 0.315 per cent for the three-month bills and 0.498 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, edged down to 0.59 per cent last week from 0.60 per cent the previous week.