Rates on short-term US Treasury bills up at weekly auction

AP News
Posted: Feb 05, 2018 6:26 PM

WASHINGTON (AP) — Interest rates on short-term Treasury bills rose in Monday's auction to their highest levels in more than nine years.

The Treasury Department auctioned $48 billion in three-month bills at a discount rate of 1.500 percent, up from 1.425 percent last week. Another $42 billion in six-month bills was auctioned at a discount rate of 1.650 percent, up from 1.625 percent last week.

The three-month rate was the highest since three-month bills averaged 1.690 percent on Sept. 8, 2008. The six-month rate was the highest since those bills averaged 1.800 percent on Oct. 20, 2008.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,962.08 while a six-month bill sold for $9,916.58. That would equal an annualized rate of 1.527 percent for the three-month bills and 1.687 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, rose to 1.89 percent on Thursday, up from 1.80 percent on Jan. 26.