Rates rise at weekly auction for US Treasury bills

Interest rates on short-term Treasury bills rose in Monday's auction to their highest levels in nine years.

The Treasury Department auctioned $42 billion in three-month bills at a discount rate of 1.185 percent, up from 1.130 percent last week. Another $36 billion in six-month bills was auctioned at a discount rate of 1.300 percent, up from 1.260 percent last week.

The three-month rate was the highest since those bills averaged 1.250 percent on Oct. 20, 2008. 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 $9,970.05 while a six-month bill sold for $9,934.28. That would equal an annualized rate of 1.205 percent for the three-month bills and 1.327 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 1.49 percent on Friday, up from 1.42 percent at the beginning of last week on Oct. 30.