Rates rise at weekly US Treasury auction

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 1.240 percent, up from 1.185 percent last week. Another $36 billion in six-month bills was auctioned at a discount rate of 1.360 percent, up from 1.300 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 $9,968.66 while a six-month bill sold for $9,931.24. That would equal an annualized rate of 1.261 percent for the three-month bills and 1.388 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, rose to 1.54 percent last Friday, up from 1.50 percent at the beginning of the week on Nov. 6.