Rates on Short-Term T-Bills Fall at Auction

The Treasury Department sold $17 billion in three-month bills at a discount rate of 1.68%, down from 1.695% last week. An additional $16 billion was sold in six-month bills at 1.675%, down from 1.735%.

The three-month rate was the lowest since Jan. 22, when the bills sold for 1.67%. The six-month rate was the lowest since Jan. 14, when the rate was 1.58%.

The new discount rates understate the actual return to investors--1.712% for three-month bills, with a $10,000 bill selling for $9,957.50, and 1.713% for a six-month bill selling for $9,915.30.

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, dipped to 2% last week from 2.06% the week before.