Interest Rates on T-Bills Are Mixed

The Treasury Department sold $5.75 billion in three-month bills at an average discount rate of 5.02%, down from 5.08% last week. An additional $7.32 billion in six-month bills sold at an average rate of 5.17%, up from 5.16%. The three-month rate was the lowest since May 11, when the bills sold for 5.01%. The six-month rate was the highest since May 11, when the average was 5.17%. The new discount rates understate the actual return to investors: 5.16% for three-month bills, with a $10,000 bill selling for $9,873.10, and 5.38% for a six-month bill selling for $9,737.40. The Treasury Department has scheduled auctions of two-year notes for today and five-year notes for Thursday. Separately, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.45% last week from 5.46% the previous week.