Rates on US Treasury bills rose to near 10-year high

Interest rates on short-term Treasury bills rose in Monday's auction to their highest levels in nearly a decade.

The Treasury Department auctioned $48 billion in three-month bills at a discount rate of 1.840 percent, up from 1.835 percent last week. Another $42 billion in six-month bills was auctioned at a discount rate of 2.000 percent, up from 1.990 percent last week.

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The three-month rate was the highest since those bills averaged 1.850 percent on Aug. 18, 2008. The six-month rate was the highest since those bills averaged 2.020 percent on Aug. 11, 2008.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,953.49 while a six-month bill sold for $9,898.89. That would equal an annualized rate of 1.87 percent for the three-month bills and 2.048 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 2.24 percent on Friday, unchanged from the beginning of last week on April 30 when the yield was also 2.24 percent.