6-Month T-Bill Rates Lowest in 6 Weeks

Interest rates on short-term Treasury securities fell in an auction, with rates on six-month bills dropping to the lowest level in six weeks. The Treasury Department sold $7.5 billion in three-month bills at a discount rate of 4.59%, down from 4.75% last week. An additional $7.5 billion was sold in six-month bills at a rate of 4.59%, down from 4.96%. The three-month rate was the lowest since June 7, when the bills sold for 4.51%. The six-month rate was the lowest since May 24, when the rate was 4.57%. The new discount rates understate the actual return to investors--4.72% for three-month bills with a $10,000 bill selling for $9,884.00 and 4.78% for a six-month bill selling for $9,768.00. An auction of two-year notes is tentatively scheduled for July 28. An auction of 9 1/2-year inflation-indexed notes will be held today. 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, fell to 5.11% last week from 5.14% the previous week.