Yields on short-term Treasury bills declined.

The Treasury Department sold $7.2 billion in new three-month bills at an average discount rate of 7.07%, down from last week’s 7.14%. Another $7.2 billion was sold in new six-month bills at an average discount rate of 7.21%, down from 7.28% last week. The rates were the lowest since July 15, when three-month bills averaged 7.06% and six-month bills sold for 7.20%. The new Treasury bill discount rates understate the actual return to investors--7.3% for three-month bills and 7.59% for six-month bills. The discount rate reflects the price discount received when government securities are purchased at less than face value.