WASHINGTON -- Interest rates on short-term Treasury bills fell in yesterday's auction, with the rate on three-month bills dropping to the lowest point in nearly a year.
The Treasury Department auctioned $13 billion in three-month bills at a discount rate of 4.760 percent, down from 4.785 percent last week. Another $12 billion in six-month bills was auctioned at a discount rate of 4.815 percent, down from 4.820 percent last week. The three-month rate was the lowest since they averaged 4.710 percent on June 5, 2006. The six-month rate was the lowest since 4.810 percent last Sept. 25.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,879.68, while a six-month bill sold for $9,756.57.
Separately, the Federal Reserve said yesterday the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was 4.90 percent last week, unchanged from the previous week.