Treasury bills mixed at weekly auction

[March 27, 2012]  WASHINGTON (AP) -- Interest rates on short-term Treasury bills were mixed in Monday's auction, with rates on three-month bills dropping to the lowest level three weeks while rates on six-month bills remained the highest in a year.

The Treasury Department auctioned $31 billion in three-month bills at a discount rate of 0.085 percent, down from 0.095 percent last week. Another $29 billion in six-month bills was auctioned at a discount rate of 0.150 percent, unchanged from last week.The three-month rate was the lowest since these bills averaged 0.080 percent on March 5. The six-month rate of 0.150 percent for the past two weeks is the highest for these bills since they averaged 0.170 percent on March 28, 2011.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.85 while a six-month bill sold for $9,992.42. That would equal an annualized rate of 0.086 percent for the three-month bills and 0.152 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, was unchanged last week at 0.20 percent, the same as the previous week.

[Associated Press]

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