Treasury Bill Rates Decline at Auction

The Treasury Department sold $7.5 billion in three-month bills at a discount rate of 4.495%, down from 4.570% last week. Another $7.5 billion was sold in six-month bills at a rate of 4.570%, down from 4.630%. The three-month rate is the lowest since May 10, when the bills sold for 4.480%. The six-month rate is the lowest since May 10, when the rate was 4.510%. The new discount rates understate the actual return to investors--4.621% for three-month bills, with a $10,000 bill selling for $9,886.40, and 4.756% for a six-month bill selling for $9,767.70. An auction of two-year notes is 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, rose to 4.89% last week from 4.79% the week before.