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Home Front Economy

U.S. 3-month bill yield seen lowest in 50 years

2008-03-18

NEW YORK, March 17 (Reuters) - The yield on U.S. 3-month Treasury bills fell below 1 percent on Monday to levels not seen in 50 years prompted by intense safety bids for cash spurred by the ongoing global credit crunch. Investors were pulling money out of stocks and even the booming commodity market even after the Federal Reserve conducted a fresh round of measures over the weekend to alleviate the credit crisis. Major U.S. stock indexes .DJI .SPX .IXIC were down as much as 1 percent. Oil prices CLc1 were off 2.6 percent at $107 a barrel.

"People are confused. They are in a reactive mode," said Lou Brien, market strategist at DRW Trading in Chicago.

The yield on three-month T-bills, considered by economists as a "risk-free" benchmark return on U.S. assets, was last quoted at 0.84 percent , down 36 basis points from late Friday. It reached a low of 0.63 percent earlier. "It's a complete place to hide out," Brien said.

The yield on 1-month Treasury bills traded even lower than their three-month counterparts. It was last quoted at 0.55 percent, down 64 basis points from late Friday. Six-month bill yield last traded at 1.23 percent, compared with 1.34 percent late on Friday.

Posted by:Steve White

#3 Well if the fed would stop dicking with the rate, they might be worth more.

Posted by: DarthVader 2008-03-18 07:37

#2 Bloomberg is quoting US 3 month treasuries at 1.08% (yield).

Posted by: phil_b 2008-03-18 07:00

#1 I don't know what market this news is about. I've been buying & redeeming T-bills since 1992. (I have never sold one, all are kept by me until maturity.) On Mon. the 17th the usual 3-month T-bill auction took place and the rate was 1.118 % for CUSIP 912795E98. This auction is open to anyone who has an account with TreasuryDirect.gov or with many brokerages such as Fidelity & Vanguard, which have free or low-cost options to access the sale. The 6-month T-bill was 1.337%. I don't participate in auctions at these low rates, but it's weird to see even lower rates publicized & fretted over.
3- and 6-month T-bills are sold almost every Monday of the year to virtually anyone who cares to bid.
Perhaps these rates only apply to those who are so financially stressed that they must sell a 90-day T-bill at when it has 89 days until maturity.

Posted by: Anguper Hupomosing9418 2008-03-18 05:47

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