T-bill yields fell to their lowest levels in five years.

The Treasury sold $7 billion in new three-month bills at an average discount rate of 7.28%, down from 7.69% last week. Another $7 billion was sold in six-month bills at an average rate of 7.43%, down from 7.90% last week. The rates were the lowest since June 23, 1980, when three-month bills sold for 7.08% and six-month bills averaged 7.11%. The new Treasury bill discount rates understate the actual return to investors--7.52% for three-month bills and 7.83% for six-month bills. The discount rate reflects the price discount received when government securities are purchased at less than face value.