Rates on US Treasury bills drop at weekly auction

WASHINGTON (AP) — Interest rates on short-term Treasury bills fell in Monday's auction with rates on six-month bills dropping to their lowest level in five months.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.230 percent, down from 0.235 percent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.350 percent, down from 0.385 percent last week.

The three-month rate was the lowest since those bills averaged 0.215 percent on Jan. 11. The six-month rate was the lowest since those bills averaged 0.330 percent five months ago on Nov. 16.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,994.19, while a six-month bill sold for $9,982.31. That would equal an annualized rate of 0.233 percent for the three-month bills and 0.355 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, fell to 0.55 percent last week from 0.62 percent the previous week.