Rates on US Treasury bills rise at weekly auction

WASHINGTON – Interest rates on short-term Treasury bills rose in Monday’s auction with rates on six-month bills climbing to their highest level in six weeks.

The Treasury Department auctioned $42 billion in three-month bills at a discount rate of 0.350 per cent, up from 0.340 per cent last week. Another $36 billion in six-month bills was auctioned at a discount rate of 0.500 per cent, up from 0.475 per cent last week.

The three-month rate was the highest since three-month bills averaged 0.360 per cent on Oct. 11. The six-month rate was the highest since those bills averaged 0.540 per cent six weeks ago on Sept. 12.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,991.15, while a six-month bill sold for $9,974.72. That would equal an annualized rate of 0.355 per cent for the three-month bills and 0.508 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, stood at 0.66 per cent on Friday, unchanged from its level at the beginning of the week on Monday, Oct. 24.