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Rates on US Treasury bills rise at weekly auction

WASHINGTON – Interest rates on short-term Treasury bills rose in Monday’s auction.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.260 per cent, up from 0.250 per cent last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.550 per cent, up from 0.515 per cent last week.

The three-month rate was the highest since these bills averaged 0.280 per cent two weeks ago on Dec. 14. The six-month rate was also the highest since these bills averaged 0.585 per cent, also on Dec. 14.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,993.43, while a six-month bill sold for $9,972.19. That would equal an annualized rate of 0.265 per cent for the three-month bills and 0.561 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 0.65 per cent last week from 0.69 per cent the week before.