T-Bill Interest Rates Decline at Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.715%, down from 1.735% last week. An additional $14 billion was sold in six-month bills at a rate of 1.81%, down from 1.83%.

Both the three-month and six-month rates were the lowest since Jan. 22, when the bills sold for 1.67% and 1.735%, respectively.

The new discount rates understate the actual return to investors--1.748% for three-month bills, with a $10,000 bill selling for $9,956.60, and 1.852% for a six-month bill selling for $9,908.50.

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, fell to 2.19% last week from 2.25% the previous week.