Rates fall at weekly Treasury bill auction

AP News
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Posted: Mar 07, 2011 5:42 PM
Rates fall at weekly Treasury bill auction

Interest rates on short-term Treasury bills fell in Monday's auction to the lowest levels in nearly nine months.

The Treasury Department auctioned $32 billion in three-month bills at a discount rate of 0.110 percent, down from 0.145 percent last week. Another $30 billion was auctioned in six-month bills at a discount rate of 0.155, down from 0.170 percent last week.

The three-month rate was the lowest since three-month bills averaged 0.065 percent on June 14 of last year. The six-month rate was the lowest since 0.150 percent, also on June 14.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.22, while a six-month bill sold for $9,992.16. That would equal an annualized rate of 0.112 percent for the three-month bills and 0.158 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, dipped to 0.26 percent last week from 0.27 percent the previous week.