WASHINGTON - Interest rates on short-term Treasury bills fell in Monday's auction with rates on three-month bills dropping to the lowest level since late 2011.
The Treasury Department auctioned $25 billion in three-month bills at a discount rate of 0.010 per cent, down from 0.020 per cent last week. Another $25 billion in six-month bills was auctioned at a discount rate of 0.040 per cent, down from 0.050 per cent last week.
The three-month rate was the lowest since three-month bills averaged 0.005 per cent on Dec. 19, 2011. The six-month rate was the lowest since those bills averaged 0.030 per cent on Sept. 16.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.75, while a six-month bill sold for $9,997.98. That would equal an annualized rate of 0.010 per cent for the three-month bills and 0.041 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 in adjustable rate mortgages, edged down to 0.10 per cent last week from 0.11 per cent the previous week.
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