T-Bill Rates Hit Four-Year Lows

The Treasury Department sold $8 billion in three-month bills at an average discount rate of 4.64%, down from 4.74% last week. Another $8 billion was sold in six-month bills at an average rate of 4.62%, down from 4.76%. The three-month rate is the lowest since Sept. 19, 1994, when the bills sold for 4.61%. The six-month rate is the lowest since June 27, 1994, when the average was 4.60%. The new discount rates understate the actual return to investors: 4.76% for three-month bills, with a $10,000 bill selling for $9,882.80, and 4.79% for a six-month bill selling for $9,766.70. Separately, the Federal Reserve Board said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, was 4.76% last week, the same as the previous week.