Rate on 3-Month T-Bills Dips to 4.91%

The Treasury Department sold $5.79 billion in three-month bills at an average discount rate of 4.91%, down from 4.94% last week. An additional $7.28 billion was sold in six-month bills at an average rate of 4.945%, up from 4.940%. The three-month rate was the lowest since Sept. 22, when the bills sold for 4.90%. The six-month rate was the highest since Aug. 3, when the average was 5.03%. The new discount rates understate the actual return to investors--5.04% for three-month bills with a $10,000 bill selling for $9,875.90 and 5.142% for a six-month bill selling for $9,750. The next auction of two-year notes will be Aug. 26. In a separate report, 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 5.23% last week from 5.31% the previous week.