WASHINGTON - Interest rates on short-term Treasury bills fell in Tuesday's auction to the lowest levels since early 2012.
The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.030 per cent, down from 0.040 per cent last week. Another $25 billion in six-month bills was auctioned at a discount rate of 0.055 per cent, down from 0.065 per cent last week.
The three-month rate was the lowest since three-month bills averaged 0.025 per cent on Jan. 17, 2012. The six-month rate was the lowest since these bills averaged 0.050 per cent on Jan. 9, 2012.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.24 while a six-month bill sold for $9,997.22. That would equal an annualized rate of 0.030 per cent for the three-month bills and 0.056 per cent for the six-month bills.
The weekly auction of three-month and six-month Treasury bills is normally held on Monday but took place on Tuesday this week because of the Labor Day holiday.
Separately, the Federal Reserve said Tuesday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged down to 0.13 per cent last week from 0.14 per cent the previous week.
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