Rates rise on short-term Treasury bills at weekly auction

October 23, 2017

WASHINGTON (AP) — Interest rates on short-term Treasury bills rose in Monday’s auction with rates on six-month bills climbing to their highest level in nine years.

The Treasury Department auctioned $42 billion in three-month bills at a discount rate of 1.105 percent, up from 1.090 percent last week. Another $36 billion in six-month bills was auctioned at a discount rate of 1.245 percent, up from 1.240 percent last week.

The three-month rate was the highest since those bills averaged 1.180 percent on July 24. The six-month rate was the highest since those bills averaged 1.400 percent on Oct. 27, 2008.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,972.07 while a six-month bill sold for $9,937.06. That would equal an annualized rate of 1.123 percent for the three-month bills and 1.270 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 1.43 percent on Friday, little changed from 1.42 percent at the beginning of last week on Oct. 16.

Update hourly