Big Drop in Short-Term Yields: The Treasury...

Big Drop in Short-Term Yields: The Treasury sold $7.64 billion of new three-month bills at an average discount rate of 5.80%, down from 5.86% last week. Another $7.61 billion in new six-month bills was sold at an average discount rate of 5.79%, down from 5.84% last week. The three-month rate was the lowest since the bills sold for 5.78% on April 18, 1988. The six-month rate was the lowest since the bills averaged 5.78% on March 14, 1988. The new discount rates understate the actual return to investors--5.98% for three-month bills, with a $10,000 bill selling for $9,851.80, and 6.06% for a six-month bill selling for $9,707.30. The discount rate reflects the price discount received when government securities are purchased at less than face value.

T-Bill Auction 3-month: 5.80% 6-month: 5.79%