Rates drop on 3-month and 6-month US Treasury bills

WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction to the lowest levels in two weeks.

The Treasury Department auctioned $37 billion in three-month bills at a discount rate of 0.315 per cent, down from 0.350 per cent last week. Another $30 billion in six-month bills was auctioned at a discount rate of 0.420 per cent, down from 0.465 per cent last week.

The three-month rate was the lowest since these bills averaged 0.305 per cent two weeks ago on Jan. 25. The six-month rate was the lowest since these bills averaged 0.415 per cent, also on Jan. 25.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.04 while a six-month bill sold for $9,978.77. That would equal an annualized rate of 0.321 per cent for the three-month bills and 0.428 per cent 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 0.52 per cent last week from 0.47 per cent the previous week.