Rates rise at weekly US Treasury bill auction, after rising in prior week

MarketsAssociated Press

Interest rates on short-term Treasury bills fell in Monday's auction, after rising last week.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.040 percent, down from 0.055 percent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.130 percent, up from 0.155 percent last week. Rising demand at the auctions caused the interest rates to fall to their lowest levels since Dec. 15.

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The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999, while a six-month bill sold for $9,993.46. That would equal an annualized rate of 0.041 percent for the three-month bills and 0.132 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 0.27 percent last week from 0.23 percent the previous week.