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Rates rise at weekly US Treasury auction with 3-month bills climbing from record low

WASHINGTON – Interest rates on short-term Treasury bills rose slightly in Monday’s auction, with three-month bills rising from a record-low to their highest level in five weeks.

The Treasury Department auctioned $26 billion in three-month bills at a discount rate of 0.015 per cent, up from an all-time low of zero per cent last week and the previous week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.110 per cent, up from 0.080 per cent last week.

The three-month rate was the highest since three-month bills averaged 0.055 per cent five weeks ago on Sept. 14. The six-month rate was the highest since those bills averaged 0.115 per cent on Sept. 21.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.62, while a six-month bill sold for $9,994.44. That would equal an annualized rate of 0.015 per cent for the three-month bills and 0.112 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, fell to 0.23 per cent last week from 0.27 per cent the previous week.