Rates fall at weekly US Treasury bill auction

WASHINGTON (AP) - Interest rates on short-term Treasury bills fell in Monday's auction to their lowest levels in three weeks.

The Treasury Department auctioned $31 billion in three-month bills at a discount rate of 0.285 percent, down from 0.340 percent last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.430 percent, down from 0.475 percent last week.

The three-month rate was the lowest since those bills averaged 0.275 percent on May 16. The six-month rate was the lowest since those bills averaged 0.370 percent, also on May 16.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,992.80, while a six-month bill sold for $9,978.26. That would equal an annualized rate of 0.289 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, edged down to 0.67 percent last week from 0.68 percent the previous week.