Rates Fall on 3- and 6-Month Treasury Bills

The Treasury Department sold $8.5 billion in three-month bills at a discount rate of 5.68%, down from 5.71% last week. An additional $7.5 billion was sold in six-month bills at a rate of 5.855%, down from 5.900%. The new discount rates understate the actual return to investors--5.844% for three-month bills with a $10,000 bill selling for $9,856.40 and 6.117% for a six-month bill selling for $9,704. An auction of two-year notes is tentatively scheduled for April 26. Separately, 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 6.17% last week from 6.3% the previous week.