The Treasury sold $7.2 billion of new...

The Treasury sold $7.2 billion of new three-month bills at an average discount rate of 7.98%, down from 8.04% last week. Another $7.2 billion of new six-month bills was sold at an average discount rate of 8.21%, down from 8.25% last week. The rates were the lowest since three-month bills sold for 7.97% on Nov. 21 and six-month bills averaged 8.13% on Nov. 28.

The new discount rates understate the actual return to investors--8.26% for three-month bills, with a $10,000 bill selling for $9,798.30, and and 8.69% for six-month bills selling for $9,584.90. The discount rate reflects the price discount received when government securities are purchased at less than face value.