Rates unchanged at weekly Treasury bill auction

AP News
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Posted: Aug 29, 2011 4:25 PM
Rates unchanged at weekly Treasury bill auction

Interest rates on short-term Treasury bills were unchanged in Monday's auction with rates on six-month bills remaining at a record low.

The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.015 percent, the same as last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.045 percent, also unchanged from last week.

The 0.015 percent for three-month bills was the lowest since these bills averaged 0.005 percent on Dec. 8, 2008, during the financial crisis.

Rates on Treasury securities have remained at low levels in recent weeks even after credit rating agency Standard & Poor's lowered its rating on long-term Treasury debt to AA+ on Aug. 5.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.62 while a six-month bill sold for $9,997.73. That would equal an annualized rate of 0.015 percent for the three-month bills and 0.046 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, fell to 0.10 percent last week from 0.11 percent the previous week.