Rates fall at weekly US Treasury auction

Staff Writer
Columbus CEO

WASHINGTON (AP) — Interest rates on short-term Treasury bills fell in Monday's auction, with three-month rates declining to their lowest level since mid-January.

The Treasury Department auctioned $34 billion in three-month bills at a discount rate of 0.300 percent, down from 0.335 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.440 percent, down from 0.510 percent last week.

The Federal Reserve decided last week to keep a key interest rate unchanged in light of global pressures that risk slowing the U.S. economy, and Fed officials expect to raise rates this year more slowly than they had previously envisioned. That sent prices of U.S. government bonds higher and yields, or rates, lower. Prices and yields move in opposite directions.

At Monday's auction, The three-month rate was the lowest since those bills averaged 0.255 percent on Jan. 19. The six-month rate was the lowest since those bills averaged 0.410 percent on Feb. 16.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.42, while a six-month bill sold for $9.977.76. That would equal an annualized rate of 0.304 percent for the three-month bills and 0.447 percent for the six-month bills.

Separately, the Federal Reserve reported Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, declined to 0.67 percent last week from 0.68 percent the previous week.