T-Bill Rates Fall in Treasury Auction

The Treasury Department sold $7.5 billion in three-month bills at auction, at a discount rate of 4.510%, down from 4.570% last week. An additional $7.53 billion was sold in six-month bills at a rate of 4.540%, down from 4.585%. The three-month rate is the lowest since Feb. 16, when the bills sold for 4.440%. The six-month rate is the lowest since Feb. 22, when it was 4.430%. The new discount rates understate the actual return to investors: 4.638% for three-month bills, with a $10,000 bill selling for $9,886.00, and 4.724% for a six-month bill selling for $9,770.50. The next auction of two-year notes will be March 24. Separately, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 4.89% last week from 4.82% the previous week.