Rates on short-term bills drop at weekly Treasury auction

AP News
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Posted: Aug 01, 2016 6:00 PM

WASHINGTON (AP) — Interest rates on short-term Treasury bills fell in Monday's auction with rates on three-month bills dropping to their lowest level in four weeks.

The Treasury Department auctioned $37 billion in three-month bills at a discount rate of 0.285 percent, down from 0.320 percent last week. Another $32 billion in six-month bills was auctioned at a discount rate of 0.395 percent, down from 0.425 percent last week.

The three-month rate was the lowest since those bills averaged 0.270 percent on July 5. The six-month rate was the lowest since those bills averaged 0.390 percent on July 11.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.80, while a six-month bill sold for $9,980.03. That would equal an annualized rate of 0.289 percent for the three-month bills and 0.401 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, edged down to 0.53 percent last week from 0.55 percent the previous week.