Interest rates on six-month bills fell to lowest level in 3 weeks at weekly Treasury auction

Monday, September 27, 2010

Interest rates fell at weekly Treasury auction

WASHINGTON — Interest rates on short-term Treasury bills fell in Monday’s auction with rates on six-month bills dropping to the lowest level in three weeks.

The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.155 percent, down from 0.160 percent last week. Another $29 billion in six-month bills was auctioned at a discount rate of 0.190 percent, down from 0.195 percent last week.

The three-month rate was the lowest since these bills averaged 0.140 percent two weeks ago on Sept. 13. The six-month rate was the lowest since these bills averaged 0.180 percent on Sept. 7.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,996.08 while a six-month bill sold for $9,990.39. That would equal an annualized rate of 0.157 percent for the three-month bills and 0.193 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, fell to 0.25 percent last week from 0.26 percent the previous week.

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