WASHINGTON - Interest rates on short-term Treasury bills fell in auction yesterday, with rates on six-month bills falling to the lowest level in more than two years.
The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 3.390 percent, down from 3.430 percent last week.
Another $19 billion in six-month bills was auctioned at a discount rate of 3.460 percent, down from 3.625 percent last week.
The three-month rate was the lowest since these bills averaged 2.850 percent on Aug. 20.
The six-month rate was the lowest since these bills averaged 3.420 percent on July 18, 2005.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,915.25 while a six-month bill sold for $9,826.04.
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 3.58 percent last week from 3.72 percent the previous week.