Rates on US Treasury bills fall at weekly auction

WASHINGTON – Interest rates on short-term Treasury bills fell in Tuesday’s auction to their lowest levels in four weeks.

The Treasury Department auctioned $37 billion in three-month bills at a discount rate of 0.300 per cent, down from 0.315 per cent last week. Another $30 billion in six-month bills was auctioned at a discount rate of 0.410 per cent, down from 0.420 per cent last week.

The three-month rate was the lowest since those bills averaged 0.255 per cent four weeks ago on Jan. 19. The six-month rate was the lowest since those bills averaged 0.370 per cent, also on Jan. 19.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.42, while a six-month bill sold for $9,979.27. That would equal an annualized rate of 0.305 per cent for the three-month bills and 0.418 per cent for the six-month bills.

The weekly Treasury bill auction, which is normally held on Monday, was held on Tuesday this week because of the President’s Day holiday.

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, edged down to 0.51 per cent last week from 0.52 per cent the previous week.