NEW YORK, Sept 1 (Reuters) - U.S. Treasury Department on Tuesday sold $35 billion in one-month bills interest-free for first time since June, a rate that was also below the 0.045 percent interest rate at the prior auction last week, Treasury data showed.
The ratio of bids to the amount offered was 3.48, up from last week's 3.27 on $40 billion worth of one-month bill supply. This was the strongest overall demand for this bill maturity in a month..
The interest rate on one-month T-bills will likely stay very low in the coming weeks as the Treasury Department will further pare its weekly offering size if Congress doesn't raise the federal debt ceiling later this year, analysts said.
"This outlook for supply is dragging short-dated bill yields down close to zero," Jefferies & Co.'s money market strategist Thomas Simons wrote in a research note. (Reporting by Richard Leong; Editing by Chizu Nomiyama)