Short-Term T-Bill Rates Continue Decline

<p>Interest rates on short-term Treasury securities fell in the latest auction to the lowest point in more than seven years.

The Treasury Department sold $14 billion in three-month bills at a discount rate of 3.435%, down from 3.51% last week. An additional $12 billion was sold in six-month bills at a rate of 3.38%, down from 3.51%.

The three-month rate was the lowest since Feb. 28, 1994, when the bills sold for 3.4%. The six-month rate was the lowest since Jan. 1, 1994, when the rate was 3.16%.

The new discount rates understate the actual return to investors--3.512% for three-month bills, with a $10,000 bill selling for $9,913.20, and 3.487% for a six-month bill selling for $9,829.10.

In a separate report, the Federal Reserve said the average yield for one-year constant-maturity Treasury bills fell to 3.59% last week from 3.64% the previous week.