Rates rise at weekly auction of US Treasury bills; 3-month bills at highest level since August

WASHINGTON – Interest rates on short-term Treasury bills rose in Monday’s auction with rates on three-month bills climbing to their highest level since August and six-month rates reaching their highest level since March.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.025 per cent, up from 0.020 per cent last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.075 per cent, up from 0.070 per cent last week.

The three-month rate was the highest since those bills averaged 0.030 per cent on Aug. 25. The six-month rate was the highest since those bills averaged 0.080 per cent on March 17.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.37, while a six-month bill sold for $9,996.21. That would equal an annualized rate of 0.025 per cent for the three-month bills and 0.076 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, was 0.14 per cent last week, unchanged from the previous week.