Rates on Short-Term T-Bills Fall at Auction

The Treasury Department sold $14 billion in three-month bills at a discount rate of 1.185%, down from 1.2% last week. An additional $16 billion was sold in six-month bills at 1.24%, down from 1.26%.

The three-month rate was the lowest since Aug. 4, 1958, when the bills sold for 1.164%. The six-month rate was the lowest since Nov. 12, when the rate was 1.225%.

The new discount rates understate the actual return to investors -- 1.207% for three-month bills, with a $10,000 bill selling for $9,970, and 1.265% for a six-month bill selling for $9,937.30.

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 1.43% last week from 1.47% the previous week.