Short-Term Treasury Bill Rates Decline

The Treasury Department sold $5.8 billion in three-month bills at an average discount rate of 4.95%, down from 5.02% last week. In six-month bills, $7.27 billion was sold at an average rate of 5.11%, down from 5.17%. The three-month rate was the lowest since April 27, when the bills sold for 4.94%. The six-month rate was the lowest since April 20, when the average was 5.06%. The new discount rates understate the actual return to investors: 5.08% for three-month bills, with a $10,000 bill selling for $9,875, and 5.32% for a six-month bill selling for $9,741.70. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, fell to 5.43% last week from 5.45% the previous week.