Rates on US Treasury bills rise at weekly auction
Feb. 20, 2018
WASHINGTON (AP) — Interest rates on short-term Treasury bills rose in Tuesday's auction to their highest levels in more than nine years.
The Treasury Department auctioned $51 billion in three-month bills at a discount rate of 1.630 percent, up from 1.570 percent last week. Another $45 billion in six-month bills was auctioned at a discount rate of 1.820 percent, up from 1.785 percent last week.
The three-month rate was the highest since those bills averaged 1.690 percent on Sept. 8, 2008. The six-month rate was the highest since those bills averaged 1.900 percent, also on Sept. 8, 2008.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,958.80 while a six-month bill sold for $9,907.99. That would equal an annualized rate of 1.659 percent for the three-month bills and 1.862 percent for the six-month bills.
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, rose to 2.00 percent on Monday, up from 1.95 percent on Feb. 13.
The Treasury's weekly bill auction, normally held on Monday, was held on Tuesday this week because of the Presidents Day holiday.