Short-Term Treasury Rates Fall

The Treasury Department sold $7.26 billion in three-month bills at an average discount rate of 4.97%, down from 5.12% last week. An additional $7.25 billion was sold in six-month bills at an average rate of 4.91%, down from 5.13%. The three-month bills’ rate was the lowest since they sold for 4.96% on Oct. 20. The six-month bills’ rate was the lowest since they sold for 4.80% on March 4, 1996. The new discount rates understate the actual return to investors: 5.10% for three-month bills, with a $10,000 bill selling for $9,874.50, and 5.10% for a six-month bill selling for $9,751.80. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.25% last week from 5.52% the previous week. The next auction of two-year notes will be Jan. 27, and five-year notes on Jan. 28.