Rates drop at weekly US Treasury bill auction

WASHINGTON (AP) - Interest rates on short-term Treasury bills fell in Monday's auction, with rates on three-month bills dipping to their lowest point since January.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.220 percent, down from 0.250 percent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.395 percent, down from 0.400 percent last week.

The three-month rate was the lowest since those bills averaged 0.215 percent on Jan. 11. The six-month rate was the lowest since those bills averaged 0.350 percent two weeks ago on April 18.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,994.44, while a six-month bill sold for $9,980.03. That would equal an annualized rate of 0.223 percent for the three-month bills and 0.401 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 up to 0.58 percent last week from 0.54 percent the previous week.