Rates mixed at weekly Treasury auction

[August 21, 2012]  WASHINGTON (AP) -- Interest rates on short-term Treasury bills were mixed in Monday's auction with rates on three-month bills dipping to the lowest level since May and rates on six-month bills unchanged.

The Treasury Department auctioned $32 billion in three-month bills at a discount rate of 0.105 percent, down from 0.110 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.145 percent, unchanged from last week.

The three-month rate was the lowest since these bills averaged 0.100 percent on May 6.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.32 while a six-month bill sold for $9,992.67. That would equal an annualized rate of 0.106 percent for the three-month bills and 0.147 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, edged up to 0.19 percent last week from 0.18 percent the previous week.

[Associated Press]

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