Short-Term T-Bill Rates Lowest Since ’99

The Treasury Department sold $12.5 billion in three-month bills at a discount rate of 5.050%, down from 5.700% last week. An additional $10.5 billion was sold in six-month bills at a rate of 4.825%, down from 5.360%. The three-month rate was the lowest since Nov. 8, 1999, when the bills sold for 5.030%. The six-month rate was the lowest since Sept. 27, 1999, when the rate was 4.810%. The new discount rates understate the actual return to investors--5.188% for three-month bills with a $10,000 bill selling for $9,872.30, and 5.014% for a six-month bill selling for $9,756.10. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 4.89% last week from 5.34% the previous week.