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Rates mixed on short-term T-bills

Associated Press / August 31, 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 dropping to the lowest level in two months while rates on six-month bills rose.

The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.145 percent, down from 0.155 percent last week. Another $30 billion was auctioned in six-month bills at a discount rate of 0.190 percent, up from 0.185 percent.

The three-month rate was the lowest since these bills averaged 0.115 percent on June 21. The six-month rate was the highest since these bills averaged 0.195 percent on Aug. 2.

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 while a six-month bill sold for $9,990.39. That would equal an annualized rate of 0.147 percent for the three-month bills and 0.193 percent for the six-month bills.

Separately, the Federal Reserve said the average yield for one-year Treasury bills rose to 0.26 percent last week from 0.25 percent the previous week.