2011 Economic Calendar
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6-Month Bill Auction
Released On 3/14/2011 11:30:00 AM For 3/14/2011 11:30:00 AM
Auction Results
6-Month Bill Treasury Rate0.135% 
Bid/Cover4.51 
Total Amount$30 B 

Highlights
Despite the lowest award rates of the quarter, which reflect demand for safety, coverage for the weekly 3- and 6-month T-bill auctions was steady at roughly 4-1/2 for both.

Definition
Treasury bills are sold at public auctions every week. The 6-month bill is also known as the 26- week bill. Competitive bids at these auctions determine the interest rate paid on each issue. A group of securities dealers, known as primary dealers, are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold the bills, resell the bills to their clients or trade them with other securities firms. Typically, the New York Fed approves about 20 securities firms to be primary dealers but that number dropped sharply during the recent financial crisis as some were merged into other firms or went bankrupt. The Fed has been rebuilding that number regularly and the latest list can be found here. Since these are public auctions, the Treasury must announce the size, date and time of the auction every week. Six-month bills are announced on Thursday for auction the following Monday and issued (settled) on Thursday. If a Monday is a banking holiday, the bills are auctioned on Tuesday. (Department of the Treasury)  Why Investors Care
 
[Chart]

Data Source: Haver Analytics
 
[Chart]
The 6-month bill rate is usually similar to the federal funds rate target; often when bond investors expect a rising rate environment, it is higher than the funds rate, but when investors expect rates to decline, it will be lower than the funds rate target. The 6-month bill rate depicted in this chart represents the high discount rate from the Treasury's weekly auction on Mondays. It only represents one moment in time, and is not an average of daily numbers. The date on the chart is associated with the issue (or settlement) date of the Treasury security, which is on the Thursday of the week that the security is auctioned. Our grid tables show the auction date of the security, which is usually on Mondays.
Data Source: Haver Analytics
 

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