Rates rise at weekly Treasury auction

[September 25, 2012]  WASHINGTON (AP) -- Interest rates on short-term Treasury bills rose in Monday's auction with rates on three-month bills climbing to the highest level since February.

The Treasury Department auctioned $32 billion in three-month bills at a discount rate of 0.110 percent, up from 0.105 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.140 percent, up from 0.130 percent last week.

The three-month rate was the highest since three-month bills averaged 0.115 percent on Feb. 27. The six-month rate was the highest since these bills averaged 0.145 percent on Aug. 20.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.22 while a six-month bill sold for $9,992.92. That would equal an annualized rate of 0.112 percent for the three-month bills and 0.142 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 at 0.18 last week, the same as the previous week.

[Associated Press]

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