Short-term US interest rates turned negative on Thursday as banks frantically stockpiled government securities in order to polish their balance sheets for the end of the year.
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With the Federal Reserve maintaining an overnight target rate of zero to 0.25 per cent, investors are demonstrating a willingness to completely forgo interest income ? or even to take a small loss ? to own securities that are seen as safe.
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On Thursday, Treasury bills maturing in January traded below zero per cent, traders said. Three-month bills traded at 1 basis point and six-month bills fell to a record low of 13bp ? compared with 14bp at the height of the crisis last year.

Investors looking for some return piled into two-year notes, driving their yield down to 0.68 per cent, a year low.