Interest rates on short-term Treasury bills fell.

The Treasury Department sold $8 billion in new three-month bills at an average discount rate of 5.35%, down from 5.39% last week. Another $8 billion was sold in new six-month bills at an average discount rate of 5.39%, down from 5.44% last week. The new discount rates understate the actual return to investors--5.50% for three-month bills, with a $10,000 bill selling for $9,866.30, and 5.62% for six-month bills selling for $9,729. The discount rate reflects the price discount received when government securities are purchased at less than face value.