Interest Rates Down in Treasury Auction

The Treasury Department sold $13 billion in three-month bills at a discount rate of 5.09%, down from 5.220% last week. An additional $11 billion was sold in six-month bills at a rate of 4.920%, down from 5.055%. The three-month rate and the six-month rate were the lowest since Jan. 8, when the bills sold for 5.05% and 4.825%, respectively. The new discount rates understate the actual return to investors--5.229% for three-month bills, with a $10,000 bill selling for $9,871.30, and 5.115% for a six-month bill selling for $9,751.30. An auction of two-year notes is scheduled for Wednesday. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills rose to 4.85% last week from 4.79% the previous week.