Treasury Bill Rates Fall in Auction

The Treasury Department sold $12 billion in three-month bills at a discount rate of 5.700%, down from 5.770% last week. An additional $10 billion was sold in six-month bills at a rate of 5.500%, down from 5.660%. The three-month rate was the lowest since June 26 when the bills sold for 5.680%. The six-month rate was the lowest since Jan. 10 when the rate was 5.420%. The new discount rates understate the actual return to investors--5.864% for three-month bills with a $10,000 bill selling for $9,855.90 and 5.737% for a six-month bill selling for $9,721.90. 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 5.440% last week from 5.730% the previous week. The next auction of two-year notes is today.