Rates on short-term bills rose at US Treasury auction

Interest rates on short-term Treasury bills rose in Monday's auction, with rates on six-month bills climbing to their highest level since October 2008.

The Treasury Department auctioned $39 billion in three-month bills at a discount rate of 1.035 percent, up from 1.020 percent last week. Another $33 billion in six-month bills was auctioned at a discount rate of 1.140 percent, up from 1.115 percent last week.

The three-month rate was the highest since those bills averaged 1.040 percent on Aug. 7. The six-month rate was the highest since those bills averaged 1.400 percent on Oct. 27, 2008.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,973.83 while a six-month bill sold for $9,942.37. That would equal an annualized rate of 1.052 percent for the three-month bills and 1.163 percent 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 1.22 percent Friday, little changed from a reading of 1.23 percent at the beginning of the week on Sept. 5.