Interest rates drop at weekly Treasury auction

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 1.520 percent, down from 1.610 percent last week. Another $23 billion in six-month bills was auctioned at a discount rate of 1.920 percent, down from 1.955 percent last week.

The three-month rate was the lowest since these bills averaged 1.420 percent on April 28. The six-month rate was the lowest since these bills averaged 1.885 percent on May 19.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,961.58 while a six-month bill sold for $9,902.93. That would equal an annualized rate of 1.547 percent for the three-month bills and 1.966 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, fell to 2.21 percent last week from 2.25 percent the previous week.