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6-month Treasury bill hits a new low

Associated Press / April 12, 2011

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WASHINGTON — Interest rates on short-term Treasury bills fell in yesterday’s auction with rates on six-month bills hitting another record low.

The Treasury Department auctioned $32 billion in three-month bills at a discount rate of 0.050 percent, the same as last week. Another $30 billion was auctioned in six-month bills at a discount rate of 0.110 percent, down from 0.130 percent last week.

This week’s and last week’s three-month rate represent the lowest point since three-month bills averaged 0.040 percent on Jan. 11, 2010. The six-month rate of 0.110 percent was a record low, surpassing the old record of 0.130 percent set 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 $9,998.74 while a six-month bill sold for $9,994.44. That would equal an annualized rate of 0.051 percent for the three-month bills and 0.112 percent for the six-month bills.

Separately, the Federal Reserve said the average yield for one-year Treasury bills slipped to 0.27 percent last week from 0.30 percent the previous week.