Rates on short-term Treasuries fall
WASHINGTON - Interest rates on short-term Treasury bills fell yesterday.
The Treasury Department auctioned $32 billion in three-month bills at a discount rate of 0.180 percent, down from 0.190 percent last week. Another $30 billion in six-month bills was auctioned at a discount rate of 0.270 percent, down from 0.285 percent last week.
The three-month rate was the lowest since those bills averaged 0.160 percent on June 15. The six-month rate was the lowest since it averaged 0.250 percent on Dec. 29.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,954.50, while a six-month bill sold for $9,986.35. That would equal an annualized rate of 0.183 percent for the three-month bills, and 0.274 percent for the six-month bills.
Rates on the bills have been moving in a narrow band below 1 percent for months, reflecting that the Federal Reserve has driven its target for the federal funds rate, a key short-term rate, to a record low between zero and 0.25 percent. Many economists say the Fed will not begin raising rates till next year.
Separately, the Fed said that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 0.45 percent last week, from 0.51 percent the previous week.