BANKING & FINANCE - July 2, 1996

Rates Mixed for Short-Term T-Bills: The Treasury Department sold $14.6 billion in three-month bills at an average discount rate of 5.12%, up from 5.10% last week. Another $14.6 billion was sold in six-month bills at an average discount rate of 5.22%, down from 5.23% last week. The three-month bill rate was the highest since they sold for 5.16% on June 10. The six-month bill rate was the lowest since they averaged 5.21% on June 3. The new discount rates understate the actual return to investors: 5.26% for three-month bills, with a $10,000 bill selling for $9,872.00, and 5.43% for a six-month bill selling for $9,737.60. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.79% last week, down from 5.82% the previous week. The next auction of 10-year Treasury notes is July 9. Two-year notes will be auctioned on July 23 and five-year notes on July 24.

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T-Bill Auction (July 1, 1996)

6-month: 5.22%

3-month: 5.13%