Short-Term T-Bill Rates Fall at Auction

The Treasury Department auctioned $16 billion in three-month bills at a discount rate of 1.54% and $14 billion in six-month bills at a discount rate of 1.475%.

The three-month rate was down from 1.61% last week and was the lowest since Jan. 14, when the bills averaged 1.53%. The six-month rate was down from 1.58% last week and was the lowest on record.

The new discount rates understate the actual return to investors--1.566% for three-month bills, with a $10,000 bill selling for $9,961.10, and 1.507% for a six-month bill selling for $9,925.40.

In a separate report, the Federal Reserve said the average yield for one-year Treasury securities, the most popular index for making changes in adjustable-rate mortgages, fell to 1.68% last week from 1.73% the week before.