WASHINGTON (AP) — Interest rates on short-term Treasury bills rose in Tuesday's auction to the highest level in eight years.
The Treasury Department auctioned $34 billion in three-month bills at a discount rate of 0.555 percent, up from 0.515 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.660 percent, up from 0.645 percent last week.
The three-month rate was the highest since three-month bills averaged 0.900 in October 2008. The six-month rate was the highest since six-month bills averaged 0.840 percent in November 2008.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,985.97 while a six-month bill sold for $9,966.63. That would equal an annualized rate of 0.564 percent for the three-month bills and 0.671 percent for the six-month bills.
Separately, the Federal reserve said Tuesday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, slipped to 0.87 percent last Friday after yielding 0.90 percent on Dec. 20.