Interest Rates on T-Bills Edge Lower

Interest rates on short-term Treasury securities declined as the Treasury Department sold $7.51 billion in three-month bills at a discount rate of 4.61%, down from 4.62% last week. An additional $7.51 billion was sold in six-month bills at a rate of 4.850%, down from 4.855%. The new discount rates understate the actual return to investors: 4.74% for three-month bills, with a $10,000 bill selling for $9,883.50, and 5.05% for a six-month bill selling for $9,754.80. An auction of two-year notes is tentatively scheduled for Wednesday. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, fell to 5.03% last week from 5.12% the previous week.