Rates Fall in Treasury Bill Auction

The Associated Press via TBO.com ^ | Oct 29, 2001 | The Associated Press Staff

[GeekDejure]

WASHINGTON (AP) - Interest rates on short-term Treasury securities fell in Monday's auction, with six-month rates reaching their lowest level ever.

The Treasury Department sold $15 billion in three-month bills at a discount rate of 2.050 percent, down from 2.170 percent last week. An additional $14 billion was sold in six-month bills at a rate of 2.005 percent, down from 2.130 percent.

The three-month rate was the lowest since Aug. 18, 1958, when the bills sold for 1.895 percent. The six-month rate was the lowest on record.

The new discount rates understate the actual return to investors - 2.089 percent for three-month bills with a $10,000 bill selling for $9,948.20 and 2.054 percent for a six-month bill selling for $9,898.60.

In a separate report, the Federal Reserve said Monday that the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 2.31 percent last week from 2.37 percent the previous week.

[GeekDejure]

DOWN . . . Down . . . down . . .

[habs4ever]

And they are still lower than Fed Funds.Is anyone awake at the Fed???

[umgud]

Unfortunately, mortgage rates are on the way up. They have had increases (small) over the last 2 weeks. Hope this isn't a trend.

[habs4ever]

It shouldn't be, but long rates have been very sticky the past 3 yrs.Real estate is the next area to feel the stress, so unless rates are rising with an additional default or risk premium added, it should be temporary.

[umgud]

Thanks.....I'm closing a new home loan in the next few weeks.