Rates inch up at weekly Treasury bill auction

AP News
Posted: Apr 25, 2011 5:27 PM
Rates inch up at weekly Treasury bill auction

Interest rates on short-term Treasury bills rose slightly in Monday's auction but still hovered close to historic lows.

The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.065 percent, up from 0.060 percent last week. Another $27 billion was auctioned in six-month bills at a discount rate of 0.115 percent, up from a record low of 0.110 percent last week.

The three-month rate was the highest since these bills averaged 0.100 percent on March 28 but still left three-month bills near the lowest levels on record. The six-month rate had been at an all-time low for two weeks. The slight rise this week left the six-month rate at its highest point since it averaged 0.130 percent on April 4.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.36, while a six-month bill sold for $9,994.19. That would equal an annualized rate of 0.066 percent for the three-month bills and 0.117 percent for 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, was unchanged at 0.24 percent last week, the same as the previous week.