Interest Rates Fall in Treasury Auction

The Treasury Department sold $7.06 billion in three-month bills at an average discount rate of 5.18%, down from 5.26% last week. An additional $7.04 billion in six-month bills was sold at an average rate of 5.31%, down from 5.33%. The rates are the lowest since March 17, when three-month bills sold for 5.13% and the six-month bill averaged 5.26%. The new discount rates understate the actual return to investors--5.32% for three-month bills with a $10,000 bill selling for $9,869.10, and 5.53% for a six-month bill selling for $9,731.60. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.94% last week from 5.81% the previous week. The next auction of inflation-indexed securities will be on April 8. Two-year notes will be auctioned on April 22 and five-year notes on April 23.