WASHINGTON - Interest rates on short-term Treasury bills fell in Monday's auction, with the rate on six-month bills reaching their lowest level in over a year and a half.
The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.040 per cent, down from 0.050 per cent last week. Another $25 million in six-month bills was auctioned at a discount rate of 0.065 per cent, down from 0.075 per cent.
The three-month rate was the lowest since those bills averaged 0.030 per cent on July 29. The six-month rate was the lowest since they averaged 0.060 per cent on Jan. 17, 2012.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.97 while a six-month bill sold for $9,996.71. That would equal an annualized rate of 0.041 per cent for the three-month bills and 0.066 per cent 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 to adjustable-rate mortgages, was 0.13 per cent last week, up from 0.12 per cent the previous week.
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