BANKING & FINANCE - July 30, 1991

Treasury Bill Rates Fall: Interest rates on short-term Treasury securities fell at auction. The Treasury Department sold $10.4 billion in three-month bills at an average discount rate of 5.58%, down from 5.60% last week. Another $10.4 billion was sold in six-month bills at an average discount rate of 5.69%, down from 5.72% last week. The three-month bill rate was the lowest since they sold for 5.56% on July 15. The six-month bill rate was the lowest since they averaged 5.65% on May 28. The new discount rates understate the actual return to investors--5.75% for three-month bills with a $10,000 bill selling for $9,859.00 and 5.96% for a six-month bill selling for $9,712.30. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 6.29% last week, down from 6.32% the previous week.

T-Bill Auction 6-month: 5.69% 3-month: 5.58%