Rates on Short-Term Treasuries Drop

The Treasury Department sold $9 billion in three-month bills at a discount rate of 5.51%, down from 5.55% last week. An additional $8 billion was sold in six-month bills at a rate of 5.76%, down from 5.77%. The new discount rates understate the actual return to investors--5.68% for three-month bills with a $10,000 bill selling for $9,860.70 and 6.03% for a six-month bill selling for $9,708.80. 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 6.20% last week from 6.24% the previous week.