3-Month T-Bill Rate at Lowest Point Since ’99

Interest rates on short-term Treasury securities fell at auction, with three-month bills hitting their lowest point in more than a year. The Treasury Department sold $13 billion in three-month bills at a discount rate of 4.98%, down from 5.09% last week. An additional $11 billion was sold in six-month bills at a rate of 4.84%, down from 4.92%. The three-month rate was the lowest since Oct. 12, 1999, when the bills sold for 4.78%. The six-month rate was the lowest since Jan. 8, 2000, when the rate was 4.825%. The new discount rates understate the actual return to investors--5.114% for three-month bills, with a $10,000 bill selling for $9,874.10, and 5.031% for a six-month bill selling for $9,755.30. Separately, 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 4.83% last week from 4.85% the week before.