Rates rise at weekly US Treasury auction

Rates rise at weekly US Treasury auction

Interest rates on short-term Treasury bills rose in Monday's auction to the highest levels in several weeks.

The United States Treasury Department auctioned US$28 billion in three-month bills at a discount rate of 0.160 per cent, up from 0.115 per cent last week. Another US$28 billion in six-month bills was auctioned at a discount rate of 0.215 per cent, up from 0.170 per cent last week.

The three-month rate was the highest since three-month bills averaged 0.165 per cent on May 24.

The six-month rate was the highest since those bills averaged 0.220 per cent on June 1.

The discount rates reflect that the bills sell for less than face value.

For a US$10,000 bill, the three-month price was US$9,995.95 while a six-month bill sold for US$9,989.13.

That would equal an annualised rate of 0.162 per cent for the three-month bills and 0.218 per cent for the six-month bills.

Separately, the US Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, slipped to 0.29 per cent last week from 0.30 per cent the previous week.

Federal Reserve policymakers met last week and repeated their pledge to hold interest rates at record lows for an "extended period" to fuel economic growth.

- AP