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T-bill rates edge upward

Associated Press / January 20, 2010

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WASHINGTON - Interest rates on short-term Treasury bills rose in yesterday’s auction to the highest levels in two weeks.

The Treasury Department auctioned $23 billion in three-month bills at a discount rate of 0.060 percent, up from 0.040 percent last week.

Another $25 billion in six-month bills was auctioned at a discount rate of 0.145 percent, up from 0.130 percent last week.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.48 while a six-month bill sold for $9,992,67. That would equal an annualized rate of 0.061 percent for the three-month bills and 0.147 percent for the six-month bills.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 0.35 percent last week from 0.41 percent the previous week.

The Treasury held its auction of three-month and six-month bills yesterday because offices were closed Monday for the Martin Luther King Jr. holiday.