T-Bill Rates Increase on Concerns Over Fed
Interest rates on short-term Treasury bills continued to surge, reflecting investors’ expectations that the Federal Reserve will raise its benchmark short-term interest rate soon.
The Treasury sold $17 billion in three-month bills at a discount rate of 1.39%, up from 1.23% last week and 1.13% the week before. An additional $15 billion was sold in six-month bills at a rate of 1.72%, up from 1.505% last week and 1.4% the week before.
The new rates understate the actual return to investors -- 1.413% for three-month bills, with a $10,000 bill selling for $9,964.90, and 1.76% for a six-month bill selling for $9,913.
In a separate report, the Fed said the average yield for one-year constant-maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 2.07% last week from 1.92% the previous week.
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