WASHINGTON — Interest rates on short-term Treasury bills fell in Monday’s auction with yields on three- month bills falling to the lowest level on record, reflecting strains in credit markets.
The Treasury Department auctioned $26 billion in three-month bills at a discount rate of 0.460 percent, down from 1.100 percent last week. Another $27 billion in six-month bills was auctioned at a discount rate of 1.100 percent, down from 1.540 percent.
The three-month rate was the lowest level ever for an initial government offering, but bills have traded at lower levels in the secondary market.
The six-month rate was the lowest since 1.080 percent on April 19, 2004.
Recent credit turmoil has prompted investors to rush to government securities. The demand has pushed yields down to extremely low levels.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,988.37, while a six-month bill sold for $9,944.39.
