Fed bids for 3-month bills total $3.3 bln, 6-month bills total $2.9 bln

Fed bids for 3-month bills total $3.3 bln, 6-month bills total $2.9 bln

U.S. Treasury Conducts $89 Billion 3-Month Bill Auction with Stable Rate
On February 23, 2026, the U.S. Treasury conducted its weekly auction for $89.00 billion in 3-month Treasury bills, maintaining the discount rate at 3.600% for the third consecutive week. The bid-to-cover ratio—a measure of auction demand—fell to 2.71, down from 2.76 the previous week and the lowest level since January 2026. This indicates slightly reduced investor appetite compared to recent auctions but remains within a historically healthy range for short-term U.S. debt.

The 3-month bill, also known as the 13-week bill, is a key tool for managing short-term government cash flow and providing liquidity to financial markets. Competitive bids at these auctions determine the interest rate, which reflects broader market expectations for Federal Reserve policy and economic conditions. The current rate of 3.600% has remained unchanged for three weeks, a rarity in today’s dynamic interest rate environment.

Treasury bills are sold at a discount to their face value, with investors earning the difference at maturity. For example, a $10,000 bill purchased at a 3.600% discount would cost approximately $9,810 and return $10,000 after 91 days. These securities are considered among the safest investments due to the U.S. government’s implicit guarantee.

The auction results highlight continued confidence in Treasury markets, despite broader economic uncertainties. The stable rate suggests that investors anticipate a neutral Federal Reserve policy trajectory in the near term, though market participants remain sensitive to inflation data and potential policy shifts.

For individual investors, Treasury auctions offer a low-cost entry point via brokers or the Treasury Direct program. Brokers facilitate secondary market transactions, allowing flexibility for those seeking maturities beyond standard auction dates.

The next 3-month bill auction is scheduled for March 3, 2026, with results to be announced on March 7. Market observers will closely watch for any shifts in demand or rate adjustments as economic indicators evolve.

(https://www.cmegroup.com/education/events/econoday/678746): Source: CME Group, U.S. Treasury auction details and definitions.