Rates on 3-month T-bills hit highest level since 2008 crisis
Interest rates on short-term Treasury bills rose in Monday's auction with rates on three-month bills rising to their highest level since the 2008 financial crisis.
The Treasury Department auctioned US$37 billion in three-month bills at a discount rate of 0.350 per cent, up from 0.305 per cent last week. Another US$30 billion in six-month bills was auctioned at a discount rate of 0.465 per cent, up from 0.415 per cent last week.
The three-month rate was the highest since those bills averaged 0.355 per cent on Nov. 10, 2008. The six-month rate was the highest since those bills averaged 0.470 per cent on Jan. 11.
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$9,991.15, while a six-month bill sold for US$9,976 .49. That would equal an annualised rate of 0.356 per cent for the three-month bills and 0.474 per cent 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, edged up to 0.47 per cent last week from 0.46 per cent the previous week.