US Treasury bill rates mixed at auction with 6-month bills falling to lowest in 2 months

Interest rates on short-term Treasury bills were mixed in Tuesday’s auction with rates on three-month bills unchanged while rates on six-month bills dipped to the lowest level since late November.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.025 per cent, unchanged from last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.075 per cent, down from 0.085 per cent last week.

The six-month rate was the lowest since these bills averaged 0.70 per cent on Nov. 24.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.37 while a six-month bill sold for $9,996.21. That would equal an annualized rate of 0.025 per cent for the three-month bills and 0.076 per cent for the six-month bills.

The weekly Treasury bill auction, normally held on Monday, was held on Tuesday this week because of the Martin Luther King holiday.

Separately, the Federal Reserve said Tuesday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 0.18 per cent last week from 0.24 per cent the previous week.