Interest Rates Fall in Treasury Auction

The Treasury Department sold $8.5 billion in three-month bills at a discount rate of 5.645%, down from 5.680% last week. An additional $7.5 billion was sold in six-month bills at a rate of 5.765%, down from 5.855%. The three-month rate was the lowest since Feb. 22, when the bills sold for 5.640%. The six-month rate was the lowest since Feb. 14, when the rate was 5.7605. The new discount rates understate the actual return to investors--5.807% for three-month bills, with a $10,000 bill selling for $9,857.30, and 6.022% for a six-month bill selling for $9,708.50. In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 6.14% last week from 6.17% the previous week. The next auction of two-year notes will be April 26.