2008 U.S. Economic Events & Analysis
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4-Week Bill Auction
Definition
Treasury bills are sold at public auctions every week. Competitive bids at these auctions determine the interest rate paid on each issue. Twenty primary dealers (as of November 30, 2007) 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. Since these are public auctions, the Treasury must announce the size, date and time of the auction every week. Four-week bills are announced on Monday for a Tuesday auction and are issued (settled) on Thursday of the same week. If a Monday is a banking holiday, the bills are auctioned on Wednesday. Why Investors Care

4-Week Bill Treasury Rate
1.500 %

Highlights
The front-end of the Treasury curve continues to reflect a flight-to-safety bid that swells and recedes minute to minute. Bids for today's $24 billion 4-week offering were in a 75 basis point range that even at the top came in below the 1.500 percent high yield. But coverage was nevertheless solid at 2.82 and indirect bidding was firm. Bill supply has been very heavy including $20 billion of 25-day cash management bills auctioned at 11:30 a.m. this morning. The Treasury has said it intends to rely on bills to cover the jump underway in the nation's fiscal deficit.

Trends
[grid]
[Chart] The 4-week note was instituted to replace the necessity for sporadic cash management bills. This weekly auction is more predictable for investors. Predictability in the Treasury market is a highly rate feature that promotes demand for these bills. The 4-week bill rate depicted in this chart represents the high discount rate from the Treasury's weekly auction on Tuesdays. It only represents one moment in time, and is not an average of daily numbers. The date on the chart is associated with the issue (or settlement) date of the Treasury security, which is on the Thursday of the week that the security is auctioned. Our grid tables show the auction date of the security, which is usually on Tuesdays.
Data Source: Haver Analytics | Consensus Data Source: Market News International and Thomson Financial

 
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