Rates Decline on Short-Term T-Bills

Interest rates on short-term Treasury securities fell in Monday’s auction. The Treasury Department sold $9 billion in three-month bills at a discount rate of 5.05%, down from 5.20% last week. An additional $8 billion was sold in six-month bills at a rate of 5.29%, down from 5.33%. The three-month rate was the lowest since Nov. 8, when the bills sold for 5.03%. The six-month rate was the lowest since Nov. 22, when the rate was 5.23%. The new discount rates understate the actual return to investors--5.20% for three-month bills, with a $10,000 bill selling for $9,872.30, and 5.52% for a six-month bill selling for $9,732.60. The next auction of two-year notes will be Dec. 22. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills rose to 5.73% last week from 5.65% the previous week.