WASHINGTON (AP) — Interest rates on short-term Treasury bills were mixed in Monday's auction with rates on three-month bills unchanged while those on six-month bills rose to their highest level since late 2008, during the financial crisis.
The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.280 percent, unchanged from last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.585 percent, up from 0.535 percent last week.
The six-month rate was the highest since those bills averaged 0.840 percent seven years ago on Nov. 17, 2008, a time when the country was facing a deep recession and the worst financial crisis in seven decades. Since then, the Federal Reserve has kept interest rates at record lows in an effort to jump-start economic growth. But economists believe the Fed will likely raise its key benchmark rate at this week's meeting of its policy-setting board.
The discount rates on Treasury bills reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.92, while a six-month bill sold for $9,970.43. That would equal an annualized rate of 0.285 percent for the three-month bills and 0.597 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 0.71 percent last week from 0.54 percent the previous week.