Rates mixed at weekly US Treasury bill auction

January 16, 2018

WASHINGTON (AP) — Interest rates on short-term Treasury bills were mixed in Tuesday’s auction with rates on three-month bills unchanged while rates on six-month bills rose to their highest levels in more than nine years.

The Treasury Department auctioned $48 billion in three-month bills at a discount rate of 1.430 percent, unchanged from last week. Another $42 billion in six-month bills was auctioned at a discount rate of 1.600 percent, up from 1.575 percent last week.

The six-month rate was the highest since those bills averaged 1.800 percent on Oct. 20, 2008.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,963.85 while a six-month bill sold for $9,919.11. That would equal an annualized rate of 1.455 percent for the three-month bills and 1.635 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, stood at 1.78 percent last Friday, unchanged from the level on Jan. 9.

The weekly Treasury bill auction, normally held on Monday, was held on Tuesday this week because of the Martin Luther King Jr. holiday.

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