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52-Week Bill Auction  
Released On 11/6/2018 1:00:00 PM For 11/6/2018 1:00:00 PM
Auction Results
Total Amount$26 B 
Bid/Cover3.05 
52-Week Bill Rate2.645% 

Highlights
Coverage, at 3.05, was soft for the monthly 52-week T-bill auction, at least in part due to the outsized $133 billion total supply of today's Treasury offerings. End investor demand for the longest maturity in the Treasury's money market arsenal was also diluted by today's volume, with non-dealers taking down just 48 percent of the $50 billion offering, their smallest share since April. The awarded 2.645 percent high discount rate was 6.5 basis points above last month's auction rate.

Definition
Also known as the 12-month or 1-year bill, the 52-week bill has the longest term to maturity among Treasury bill offerings and its auctions are the least frequent, held just once every 4 weeks while other Treasury bill maturities are auctioned weekly. 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 auctions sufficiently in advance. Except for holidays or special circumstances, 52-week bills are announced every 4 weeks on Thursday for auction the following Tuesday and issued (settled) on the Thursday following the auction. (Department of the Treasury)  Why Investors Care
 
[Chart]

Data Source: Haver Analytics
 
[Chart]
The yield on the 52-week Treasury bill is typically somewhat higher than the federal funds rate except when markets expect upward or downward changes in monetary policy through the fed funds rate. The chart depicts the high discount rate awarded at 52-week T-bill auctions since January 2012 up to and including the latest auction results.
Data Source: Haver Analytics
 

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