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Yields on short-term Treasury bills declined again.

The Treasury sold $7 billion in new three-month bills at an average discount rate of 6.73%, down from 7.21% last week. Another $7 billion was sold in new six-month bills at an average rate of 6.9%, down from 7.35% last week. The rates were the lowest since June 16, 1980, when three-month bills sold for 6.37% and six-month bills averaged 6.66%. The new Treasury bill discount rates understate the actual return to investors--7.94% for three-month bills and 7.25% for six-month bills. The discount rate is the price received when government securities are purchased at less than face value.


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