Interest rates on short-term Treasury bills fell.

The Treasury Department sold $6.4 billion in new three-month bills at an average discount rate of 5.47%, down from 5.81% last week. Another $6.4 billion was sold in six-month bills at an average discount rate of 5.74%, down from 6.16% last week. The rates were the lowest since three-month bills sold for 5.40% on Feb. 23 and six-month bills averaged 5.63% on April 6. The new discount rates understate the actual return to investors--5.64% for three-month bills, with a $10,000 bill selling for $9,861.70, and 6.01% for six-month bills selling for $9,709.80. The discount rate reflects the price discount received when government securities are purchased at less than face value.