WASHINGTON -- Interest rates on short-term Treasury bills fell in yesterday's auction with rates on three-month bills dropping to the lowest level in more than a year.
The Treasury Department auctioned $14 billion in three-month bills at a discount rate of 4.640 percent, down from 4.710 percent last week. Another $14 billion in six-month bills was auctioned at a discount rate of 4.765 percent, down from 4.790 percent last week.
The three-month rate was the lowest since these bills averaged 4.635 percent on April 24, 2006.
The six-month rate was the lowest since 4.735 percent on May 14 of this year.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,882.71, while a six-month bill sold for $9,759.10.
Separately, the Federal Reserve said yesterday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged up to 4.98 percent last week from 4.96 percent the previous week.