Rates rise at weekly Treasury auction

[June 22, 2010]  WASHINGTON (AP) -- Interest rates on short-term Treasury bills rose in Monday's auction to the highest levels in three weeks.

The Treasury Department auctioned $27 billion in three-month bills at a discount rate of 0.115 percent, up from 0.065 percent last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.170 percent, up from 0.150 percent last week.

The three-month rate was the highest since three-month bills averaged 0.130 percent on June 7. The six-month rate was the highest since these bills average 0.210 percent, also on June 7.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.09 while a six-month bill sold for $9,991.41. That would equal an annualized rate of 0.117 percent for the three-month bills and 0.173 percent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 0.30 percent last week from 0.33 percent the previous week.

[Associated Press]

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