Tuesday, December 9, 2008

Treasury Bills Trade at Negative Rates For The First Time Ever

Treasury Bills trade at negative rates for the first time ever. These are the three-month Treasury Bills. This news comes on a day when the Dow dropped more than 240 points. 200+ point swings in the Dow have seemingly become common place over the last week or so. The Treasury Bill news is not a directly based on the Dow, but more general market fears causing investors turn to the bills for safety.


"Treasuries rose, pushing rates on the three-month bill negative for the first time, as investors gravitate toward the safety of U.S. government debt amid the worst financial crisis since the Great Depression.

The Treasury sold $27 billion of three-month bills yesterday at a discount rate of 0.005 percent, the lowest since it starting auctioning the securities in 1929. The U.S. also sold $30 billion of four-week bills today at zero percent for the first time since it began selling the debt in 2001.

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