Treasury sells 3-years at lowest rate since Nov.

AP News
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Posted: Jun 07, 2011 5:38 PM
Treasury sells 3-years at lowest rate since Nov.

Short-term government bond prices inched up Tuesday after the Treasury managed to borrow from investors at the lowest rate in seven months.

The Treasury sold $32 billion in three-year notes Tuesday in the first of three auctions this week. The notes were priced to yield 0.76 percent, the lowest rate at a three-year auction since last November.

Investors placed bids for 3.28 times the $32 billion in three-year notes up for sale Tuesday. That's slightly better than the 3.18 average of the previous four auctions.

Traders have rushed into Treasurys in recent weeks on signs the economic recovery was becoming sluggish. When bond prices rise, their yields fall. That translates into lower borrowing rates for the government.

Longer-dated Treasury prices traded flat Tuesday after making large gains last week.

The price of the 10-year Treasury ended the day unchanged from late Monday. Its yield was 3.01 percent.

The 30-year bond lost 6.3 cents. Its yield inched up to 4.26 percent from 4.25 percent. Short-term Treasury securities edged higher, lowering yields. The yield on the two-year slipped to 0.41 percent from 0.43 percent.

In the market for short-term Treasury bills, the yield on the three-month T-bill was unchanged at 0.03 percent. Its discount was 0.04 percent.


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