2018 Economic Calendar
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3-Month Bill Auction  
Released On 5/7/2018 11:30:00 AM For 5/7/2018 11:30:00 AM
Auction Results
Total Amount$48 B 
Bid/Cover2.95 
3-Month Bill Treasury Rate1.840% 

Highlights
Coverage was moderate for Monday's T-bill auctions, at 2.95 for the 3-month slightly below average and at 3.12 for the 6-month slightly above the average for this year. Demand from end investors was subdued, with non-dealers taking down 40 percent of the $48 billion 3-month offering, their smallest share since April 9, while their 48 percent takedown of the $42 billion offered in the 6-month was the smallest since February 26. The 1.840 percent high discount rate awarded for the 3-month was 0.5 basis points higher than last week's rate while the 6-month rate rose 1 basis point to 2.000 percent.

Definition
Treasury bills are sold at public auctions every week. The 3-month bill is also known as the 13-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 2008 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. Three-month bills are announced on Thursday for auction the following Monday and are 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 3-month bill rate is usually similar to the federal funds rate target; often when investors expect a rising rate environment, it is higher than the funds rate, but when they expect rates to decline, it will be lower than the funds rate target. The 3- 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 dates on the chart and the grid are the auction dates of the security, which are usually on Mondays.
Data Source: Haver Analytics
 

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