Rates on US Treasury bills rise at weekly auction
WASHINGTON (AP) -- Interest rates on short-term Treasury bills rose for a second straight week in Monday's auction, reaching their highest level since May 31, as global economic worries eased.
The Treasury Department auctioned $37 billion in three-month bills at a discount rate of 0.320 percent, up from 0.310 percent last week. Another $32 billion in six-month bills was auctioned at a discount rate of 0.430 percent, up from 0.390 percent last week.
The increases followed several weeks marked by economic anxiety, amplified by Britain's surprise vote to leave the European Union. That spurred investors to embrace the relative safety of U.S. government debt - driving up the bonds' prices and slashing their yields to record lows.
The rate on three-month bills at Monday's auction was the highest since those bills averaged 0.340 percent on May 31. The six-month rate was the highest since those bills averaged 0.475 percent on the same day.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,991.91, while a six-month bill sold for $9,978.26. That would equal an annualized rate of 0.325 percent for the three-month bills and 0.437 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, jumped to 0.52 percent last week from 0.46 percent the previous week.