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Rates unchanged at weekly US Treasury bill auction

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The Associated Press | May 29, 2012 03:57 PM EST | AP


Interest rates on short-term U.S. Treasury bills were unchanged in Tuesday's auction, remaining at the lowest levels since late April.

The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.085 percent, the same as last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.140 percent, also unchanged from last week.

The three-month rate for the past two weeks has been at the lowest level since three-month bills averaged 0.80 percent on April 23. The six-month rate for the past two weeks has been at the lowest level since these bills averaged 0.130 percent, also on April 23.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.85 while a six-month bill sold for $9,992.92. That would equal an annualized rate of 0.086 percent for the three-month bills and 0.142 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, edged up to 0.21 percent last week from 0.20 percent the previous week.

The weekly bill auction is normally held on Monday. It took place on Tuesday this week because of the federal holiday on Memorial Day.