Rates fall at weekly US Treasury bill auction

AP News

7/1/2013 2:49:32 PM - AP News

WASHINGTON (AP) — Interest rates on short-term Treasury bills fell in Monday's auction to the lowest levels in two weeks.

The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.050 percent, down from 0.060 percent last week. Another $25 billion in six-month bills was auctioned at a discount rate of 0.085 percent, down from 0.105 percent last week.

The three-month rate was the lowest since these bills averaged 0.045 percent on June 17. The six-month rate was the lowest since these bills averaged 0.075 percent, also on June 17.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.75 while a six-month bill sold for $9,995.73. That would equal an annualized rate of 0.051 percent for the three-month bills and 0.086 percent 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 0.16 percent last week from 0.13 percent the previous week.