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Rates on 3-month T bills decline

Associated Press / March 30, 2010

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WASHINGTON — Interest rates on short-term Treasury bills were mixed in yesterday’s auction, with rates on three-month bills declining. Rates on six-month bills were unchanged.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.145 percent. That was down from 0.155 percent last week and was the lowest since March 1, when three-month rates were 0.125 percent. Another $29 billion in six-month bills was auctioned at a discount rate of 0.240 percent, unchanged from 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 $9,996.33; a six-month bill sold for $9,987.87. That would equal an annualized rate of 0.147 percent for the three-month bills and 0.244 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, edged up to 0.42 percent last week, from 0.41 percent.