The interest rate on six-month U.S. Treasury bills dropped to its lowest level on record at the weekly Treasury auction, the government said Monday.

The Treasury Department said it auctioned $27 billion in six-month bills at a yield of 0.25 percent, an all-time low. That's down from a rate of 0.285 percent last week.

Treasury rates have fallen to historic lows as the worst financial crisis in 70 years has triggered a rush by investors to the safety of government securities. Higher demand for such securities pushes their yield, or interest rate, down.

The lower rates make it cheaper for the government to borrow money, just as the federal deficit is set to balloon due to the rising cost of aid to banks, increased spending on unemployment insurance and lower tax revenues.

The department also auctioned $26 billion in three-month bills at a yield of 0.05 percent, up slightly from last week's 0.04 percent. That matches the rate from two weeks ago and is the highest since three-month bills averaged 0.15 percent on Nov. 24.

Earlier this month, rates on the three-month bill fell to a record low of 0.005 percent.

The rates are known as discount rates because the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.75 while a six-month bill sold for $9,987.43. That equals an annualized rate of 0.051 percent for three-month bills and 0.254 percent for the six-month securities.

Treasury won't grant relief for required minimum distribution for this year.

The Treasury has decided against granting any relief to retirees who were hoping to take smaller 2008 distributions from their depleted individual retirement accounts.

Last week, Congress passed a bill suspending--for 2009--rules that force IRA owners over 70 and a half years old, as well as those who have inherited IRAs, to take "required minimum distributions" (RMDs) from these accounts annually. The Treasury Department, meanwhile, had been considering easing the pain for 2008 too.

ormally, the RMD is calculated based on an IRA owner's age (older folks must take out more) and his or her IRA balance on Dec. 31 of the previous year. Outside tax lawyers believed the Treasury had the authority to allow 2008 distributions to be based on some date in late 2008 after the market had tanked. That would have led to smaller required 2008 distributions.

Treasury and the Internal Revenue Service have decided, however, that since Congress has now acted, they will not allow this, according to a letter being sent to several senators and congressmen who had requested help from Treasury.

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Any changes that the Treasury could make administratively for 2008 would be "complicated and confusing for individuals and plan sponsors," the letter states, and the relief would not be available as "uniformly" to taxpayers as the change passed by Congress for 2009. That's because most seniors already have taken their 2008 payouts.

"This will be very upsetting for taxpayers forced to sell in a down market or to take more out of their tax-preferred accounts and transfer them now into taxable accounts," says Clint Stretch, managing principal of tax policy at Deloitte Tax of Treasury’s decision.

So if you were waiting for the Treasury to act (or for an end of the year rally in the market) before withdrawing funds from your IRA, call your broker or fund company now and ask for your 2008 RMD. Or at least find out the last day you can request it.

Vanguard Group gives customers until 4 p.m. on Dec. 31 to call and request their 2008 RMD, but most IRA custodians require more notice. Be careful. If you don't take the money by the end of the year, you could be subject to a 50% penalty on the RMD, in addition to normal taxes.

NEW YORK (CNNMoney.com) -- President-elect Barack Obama is expected to nominate New York Federal Reserve President Timothy Geithner for Treasury Secretary.

Two sources close to the transition told CNN on Friday that Geithner is "on track" to be offered the post. An announcement is expected within days.

Geithner has played a central role in the government's efforts to wrangle the credit crisis, which has damaged markets and economies worldwide. While a number of those efforts have been controversial, Geithner remains a well-regarded figure from Wall Street to Washington.

In the wake of the Geithner news, stocks soared in late-day trade on Friday. The Dow closed nearly 500 points higher, pushing back above 8,000, after a dismal week.

Many believe the post of Treasury Secretary will be the most important in the next administration's cabinet. And indeed, Geithner would inherit one of the toughest jobs in Washington.

Geithner would be charged with restoring stability to the financial markets, the banking system and the housing sector through oversight of the controversial $700 billion financial rescue package, of which about half is still available for use at the discretion of the Treasury Secretary.

He would also be chief overseer of the international push to reform the regulatory regime for the financial system, which, like a sputtering lemon on the autobahn, has been severely outrun by 21st century developments in financial practices and products.

His overarching task: Ensure that what happened to world markets and economies in the fall of 2008 never happens again.

In the span of just two months, Americans and investors around the world have lost trillions in wealth, economies have fallen into recession like dominoes and the current prospects for recovery are insufficient to offer comfort. All the while, the foreclosure beat goes on, with roughly 165,000 more Americans losing their homes in September and October, bringing the total to 936,000 since August 2007.

Expect Geithner, if nominated, to roll up his sleeves and get busy even before his confirmation hearings with Congress, which could come before Inauguration Day.

Henry Paulson, the current Treasury Secretary, has indicated that he's reserved office space for his successor so that the Bush and Obama Treasury teams can work closely to insure a smooth transition during what has become the most tumultuous period for the U.S. financial system and economy in recent history.

Often described as brilliant but modest, Geithner, 47, has held for the past five years one of the most powerful, if little known, jobs in the country as president of the New York Federal Reserve. His post at the New York Fed is essentially one of Wall Street watchdog. He also sits on the Federal Open Market Committee, which sets the country's monetary policy.

Geithner was the U.S. Federal Reserve's point person on the rescue of Bear Stearns and American International Group (AIG, Fortune 500) as well as in the failed talks to keep Lehman Brothers out of bankruptcy.

Lehman's demise is blamed by many for the freeze up in global credit markets that followed immediately afterwards.

He is typically cited as one of the few people on or off Wall Street who can begin to untangle the murky and unregulated market of credit default swaps, the so-called "side bets" that felled AIG. He has pushed for greater transparency and the creation of a central clearinghouse where credit default swaps could be recorded and secured. And, according to Fortune, he has gotten informal promises from banks that they would participate.

Prior to joining the Fed, he served as director of policy development and review at the International Monetary Fund. Before that, he was the under secretary of the Treasury for international affairs under Treasury Secretaries Robert Rubin and Lawrence Summers.

His is an international background, which would come in handy at a time when G-20 governments have pledged to coordinate efforts to dig out their economies and markets. Geithner has lived in China, Japan, Thailand, India and East Africa. He got his bachelor's from Dartmouth in government and Asian studies and his master's in international economics and East Asian studies from Johns Hopkins School of Advanced International Studies.

Indeed, during his years at the Treasury, he played a central role in the agency's handling of international crises. A profile of him in The New Republic asserted that without his influence "the '90s might have looked very different ... [His role made him] Treasury's first-responder to foreign-currency emergencies, like the kind that plagued East Asia throughout the decade."

Banking regulators are working today to resolve accounting roadblocks that would hold up the government's plan to revive financial markets by investing $250 billion in the nation's banks.

Paulson Describes Moves as 'Powerful Tactical Steps'

Senate Majority Leader Harry Reid, D-Nev., speaks to reporters after members of Congress met with SEC Chairman Chris Cox, 3rd left, and Treasury Secretary Henry Paulson, fourth from left, Speaker Nancy Pelosi, D-Calif., and Federal Reserve Board Chairman Ben Bernanke. right. Congressional leaders met with financial leaders late into the evening Thursday, Sept. 18, 2008 on Capitol Hill in Washington. (Lauren Victoria Burke - AP)