Short-Term Treasury Rates Fall at Auction

The Treasury Department sold $8 billion in three-month bills at a discount rate of 4.68%, down from 4.79% last week. An additional $8 billion was sold in six-month bills at a rate of 4.9%, down from 4.915%. The new discount rates understate the actual return to investors--4.815% for three-month bills, with a $10,000 bill selling for $9,881.70, and 5.108% for a six-month bill selling for $9,752.30. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 5.23% last week from 5.13% the previous week. The next auction of two-year notes will be Aug. 25.