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Rates rise at weekly US Treasury bill auction with 6-month bill at highest level in 2 years

WASHINGTON – Interest rates on short-term Treasury bills rose in Monday’s auction with rates on six-month bills climbing to their highest level in more than two years.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.055 per cent, up from 0.035 per cent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.155 per cent, up from 0.110 per cent last week.

The three-month rate was the highest since three-month bills averaged 0.095 per cent on Feb. 10. The six-month rate was the highest since six-month bills averaged 0.160 per cent on Oct. 29, 2012.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.63, while a six-month bill sold for $9,992.21. That would equal an annualized rate of 0.056 per cent for the three-month bills and 0.157 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 0.23 per cent last week from 0.20 per cent the previous week.