WASHINGTON - Interest rates on short-term Treasury bills fell in Tuesday's auction with rates on six-month bills dropping to the lowest level since late 2004.
The Treasury Department auctioned $21 billion in three-month bills at a discount rate of 2.370 percent, down from 3.080 percent last week. Another $19 billion in six-month bills was auctioned at a discount rate of 2.400 percent, down from 2.950 percent last week.
The three-month rate was the lowest since these bills averaged 2.320 percent on Jan. 24, 2005. The six-month rate was the lowest since these bills averaged 2.380 percent on Dec. 12, 2004.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,940.09 while a six-month bill sold for $9,878.67.
Separately, the Federal Reserve said Tuesday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 2.83 percent last week from 3.04 percent the previous week.
The normal Monday Treasury auction was held on Tuesday this week because of the Martin Luther King federal holiday.
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