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Interest rates on short-term T-bills fell.

The Treasury Department sold $7.4 billion in new three-month bills at an average discount rate of 6.11%, down from 6.31% last week. Another $7.4 billion was sold in new six-month bills at an average discount rate of 6.18%, down from 6.39% last week. The new discount rates understate the actual return to investors--6.29% for three-month bills and 6.47% for six-month bills. The discount rate reflects the price discount received when government securities are purchased at less than face value. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills was 6.85% last week, down from 7% in the previous week.


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