Treasury auctioned $82 billion of six-month bills on October 5 at a high investment rate of 4.314 percent, the first decline in the weekly sale since the August 17 auction. The rate had risen six weeks in a row, from 3.907 percent in mid-August to 4.441 percent on September 28, a stretch that included the Federal Reserve’s September 16 rate increase. Savers who bought at the latest sale lock in more than the 4.00 percent ceiling of the Fed’s benchmark range, though 0.127 point less than a week earlier. The bills are issued October 8 and pay full face value on April 8, 2027.
A six-month bill pays no regular interest. Buyers pay less than face value and collect the full amount at maturity, and the gap is the earnings. At the October 5 auction the price at the high rate was $97.894361 per $100 of face value, which works out to $9,789.44 for a $10,000 bill and a gain of $210.56 by April 8, 2027. Treasury publishes two rates for the same bill: a 4.165 percent discount rate, which measures that gain against face value, and the 4.314 percent investment rate, which measures it against the price actually paid.
The investment rate is the figure to set beside a bank CD or savings account, and it comes with a trade: the money stays committed until April 8, 2027. The 13-week bill sold at the same auction cleared at an investment rate of 4.149 percent, so six months of patience paid 0.165 point more. Treasury’s daily par yield curve put the six-month point at 4.30 percent on Monday, October 5, and 4.28 percent on Wednesday, October 7, so the market had already drifted slightly below the auction result before the bills were even issued.
Bills bought at the October 5 sale are locked in until April 8, 2027, while a new six-month rate gets set at every weekly auction in between.
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Six weekly gains, then the first slip
The weekly series shows how steady the climb was. After the August 17 sale at 3.907 percent, the six-month bill moved to 3.918 percent on August 24, 4.018 percent on August 31, 4.023 percent on September 8, 4.203 percent on September 14, 4.303 percent on September 21 and 4.441 percent on September 28, according to Treasury’s Fiscal Data auction table. The October 5 result leaves the bill 0.407 point above its mid-August level, so most of the increase survived the slip.
Demand did not fade with the rate. Bids totaled 2.79 times the amount offered at the latest sale, up from 2.64 a week earlier and 2.62 the week before that, though below the 3.05 of August 24. Primary dealers, the banks that trade directly with the Fed, were awarded $20.76 billion, indirect bidders $50.05 billion and direct bidders $8.36 billion, while noncompetitive buyers, who accept whatever rate the auction sets, took $2.03 billion, according to the auction results.
Bills from four weeks to six months, ranked by rate
The October 5 result is the top of a short ladder. The four-week bill sold October 1 at 3.956 percent, the six-week bill on October 6 at 4.018 percent, the eight-week bill on October 1 at 4.071 percent, the 13-week bill on October 5 at 4.149 percent and the 17-week bill on October 7 at 4.219 percent. Each added stretch of waiting paid a little more, and the 26-week bill at 4.314 percent paid the most of the group, the same Fiscal Data table shows.
The two rates published for each sale can mislead when quotes are compared. Treasury’s discount rate of 4.165 percent on the six-month bill is calculated on a 360-day year against face value, and the investment rate of 4.314 percent uses the price paid and a 365-day year, which puts it on the same footing as a bond or bank yield. The gap is about 0.15 point at this price. The 13-week bill shows the same pattern, a 4.050 percent discount rate beside a 4.149 percent investment rate.
The Fed’s September increase and what comes next
The Federal Open Market Committee raised the federal funds target range by a quarter point, to 3.75 to 4 percent, on September 16 by a 12-0 vote, the minutes of that meeting show. A six-month bill at 4.314 percent sits 0.314 point above the top of that range. Participants told the committee they had not seen sufficient progress on lowering inflation, and most judged that “another increase in the target range for the federal funds rate would likely be appropriate by year end.”
A fixed-rate bill and a Fed leaning toward another increase pull in different directions. The bill’s 4.314 percent holds through April 8, 2027 whatever the committee does, while a savings account or a series of rolled-over 13-week bills reprices as rates move. Treasury’s curve already showed longer money earning more on October 5: 4.22 percent for three months, 4.30 percent for six months and 4.47 percent for one year.
Tracking the next six-month result
The free route to the same numbers is the Treasury curve page cited above, which lists rates for every term from one month to 30 years. For the week so far it shows the six-month point at 4.27 percent on October 1 and 2, 4.30 percent on October 5, and 4.28 percent on October 6 and 7. That curve is a daily market estimate. The auction table is the record of what bidders actually accepted.
The 26-week bill goes back on sale every week, so the 4.314 percent result is already a week-old print by the time the bills settle on October 8. For anyone planning around the April 8, 2027 maturity, the comparison that counts is the investment rate at the next sale against 4.314 percent, measured on the same basis.
Treasury’s own numbers point both ways. The one-year point fell from 4.47 percent to 4.42 percent between October 5 and October 7 and the six-month point from 4.30 percent to 4.28 percent, the same direction the auction took, while the Fed’s minutes say most participants expect another increase by year end. The next weekly results will show whether October 5 was a pause in the climb that began in mid-August or the start of a turn.
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This article was produced with AI assistance and reviewed by The Money Overview’s editorial team.
