Short-Term T-Bill Rates Mixed in Auction

Interest rates on short-term Treasury securities were mixed in the Treasury’s auction. The Treasury Department sold $12.5 billion in three-month bills at a discount rate of 5.700%, unchanged from last week. Last week’s rate was the lowest since June 26, when the rate was 5.680%. An additional $10.5 billion was sold in six-month bills at a rate of 5.360%, down from 5.500%. The six-month rate was the lowest since Dec. 6, 1999, when the rate was 5.290%. 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 5.586% for a six-month bill selling for $9,729.00. The next auction of 10-year inflation-indexed notes will be Jan. 10, and the next auction of two-year notes will be Jan. 24. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills fell to 5.34% last week from 5.44% the previous week.