Rates Mixed on Short-Term T-Bills

The Treasury Department sold $5.78 billion in three-month bills at an average discount rate of 4.99%, down from 5.01% last week. An additional $7.26 billion was sold in six-month bills at an average rate of 5.12%, up from 5.07%. The three-month rate was the lowest since June 1, when the bills sold for 4.95%. The six-month rate was the highest since June 8, when the average was 5.16%. The new discount rates understate the actual return to investors: 5.12% for three-month bills, with a $10,000 bill selling for $9,873.90, and 5.33% for a six-month bill selling for $9,741.20. Upcoming auctions are scheduled today for two-year notes and Wednesday for five-year notes. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.40% last week from 5.42% the previous week.