February 08, 2008

Current US Treasury Bill rates seem to be sliiiiiiiiiding

Treasury securities

Investors and those following the movement of interest rates look at the movement of Treasury yields as an indicator of things to come. Their rates are considered an important benchmark: Because Treasury securities are backed by the full faith and credit of the U.S. Treasury, they represent the rate at which investment is considered risk-free.

Treasury securities Updated 2/6/2008

This week Month ago Year ago
One-Year Treasury Constant Maturity 2.23 3.18 5.10
91-day T-bill auction avg disc rate 2.230 3.180 5.010
182-day T-bill auction avg disc rate 2.160 3.170 4.955
Two-Year Treasury Constant Maturity 2.21 2.88 4.96
Five-Year Treasury Constant Maturity 2.84 3.29 4.85
Ten-Year Treasury Constant Maturity 3.67 3.94 4.86
One-Year CMT (Monthly) 2.71 3.26 5.06
One-Year MTA 4.326 4.522 4.983

How Treasury securities work
Since investors in riskier investments command a higher return as compensation, the yields on many bonds and money market instruments are priced at a spread over the corresponding risk-free Treasury rate. Yields on money markets and certificates of deposit are often priced relative to yields on Treasuries of a similar length. Adjustable rate mortgages can be indexed to the one-year Treasury. Fixed mortgage rates are closely linked to movements in long-term Treasury yields, as mortgages are often packaged together and sold as mortgage-backed bonds. Yields on short-term Treasuries can behave differently from yields on longer-term Treasuries.

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