Rates Decline on 3-Month, 6-Month T-Bills

The Treasury Department sold $10 billion in three-month bills at a discount rate of 3.66%, down from 3.885% last week. An additional $9 billion was sold in six-month bills at a rate of 3.62%, down from 3.86%. The new discount rates understate the actual return to investors--3.745% for three-month bills, with a $10,000 bill selling for $9,907.50, and 3.738% for a six-month bill selling for $9,817.00. In a separate report, the Federal Reserve said that the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 3.9% last week from 3.82% the previous week.