Rates on US Treasury bills rising at weekly auction

Interest rates on short-term Treasury bills rose in Monday's auction, with rates on six-month bills rising to their highest level since in nearly nine years.

The Treasury Department auctioned $42 billion in three-month bills at a discount rate of 1.045 percent, up from 1.035 percent last week. Another $36 billion in six-month bills was auctioned at a discount rate of 1.180 percent, up from 1.140 percent last week.

The three-month rate was the highest since those bills averaged 1.070 percent on July 31. 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 $9,973.58 while a six-month bill sold for $9,940.34. That would equal an annualized rate of 1.062 percent for the three-month bills and 1.204 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 1.28 percent last Thursday, up from 1.22 percent on Sept. 8.