Short-Term T-Bill Rates Mixed in Auction

The Treasury Department sold $10 billion in three-month bills at a discount rate of 4.7%, down from 4.71% last week. An additional $10 billion was sold in six-month bills at a rate of 4.53%, up from 4.495%. The three-month rate was the lowest since Sept. 20, 1999, when the bills sold for 4.660%. The six-month rate was the highest since Feb. 20, when the rate was 4.77%. The new discount rates understate the actual return to investors--4.822% for three-month bills with a $10,000 bill selling for $9,881.20 and 4.7% for a six-month bill selling for $9,771. In a separate report, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 4.47% last week from 4.69% the previous week.