Rates on US Treasury bills rise at weekly auction

WASHINGTON – Interest rates on short-term Treasury bills rose in Monday’s auction to their highest levels since the start of February.

The Treasury Department auctioned $37 billion in three-month bills at a discount rate of 0.320 per cent, up from 0.300 per cent last week. Another $30 billion in six-month bills was auctioned at a discount rate of 0.455 per cent, up from 0.410 per cent last week.

The three-month rate was the highest since those bills averaged 0.350 per cent on Feb. 1. The six-month rate was the highest since those bills averaged 0.465 per cent, also on Feb. 1.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,991.91 while a six-month bill sold for $9,976.99. That would equal an annualized rate of 0.326 per cent for the three-month bills and 0.464 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 0.53 per cent last week from 0.51 per cent the previous week.