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Rates rise on Treasury bills to highest level since 2008

July 30, 2018

WASHINGTON (AP) — Interest rates on short-term Treasury bills rose in Monday’s auction to their highest levels in more than a decade.

The Treasury Department auctioned $51 billion in three-month bills at a discount rate of 2.000 percent, up from 1.97 percent last week. Another $45 billion in six-month bills was auctioned at a discount rate of 2.160 percent, up from 2.140 percent last week.

The three-month rate was the highest since those bills averaged 2.050 percent on June 16, 2008. The six-month rate was the highest since those bills averaged 2.255 percent on June 23, 2008.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,949.44 while a six-month bill sold for $9,890.80. That would equal an annualized rate of 2.038 percent for the three-month bills and 2.214 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, stood at 2.43 percent on Friday, up slightly from the beginning of last week when the yield was 2.42 percent on July 23.

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