Rates Decline on 3-, 6-Month T-Bills

The Treasury Department sold $5.79 billion in three-month bills at an average discount rate of 4.96%, down from 5.05% last week. An additional $7.26 billion was sold in six-month bills at an average rate of 5%, down from 5.08%. The three-month rate is the lowest since Oct. 6, when the bills sold for 4.93%. The six-month rate is the lowest since March 23, when the average was 4.99%. The new discount rates understate the actual return to investors: 5.09% for three-month bills, with a $10,000 bill selling for $9,874.60, and 5.20% for a six-month bill selling for $9,747.20. Coming auctions are tentatively scheduled for April 28 for two-year notes and April 29 for five-year notes. Separately, the Federal Reserve Board said that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, fell to 5.36% last week from 5.39% the previous week.