Interest Rates Fall in T-Bill Auction

Interest rates on short-term Treasury securities fell in the latest auction.

The Treasury Department sold $15 billion in three-month bills at a discount rate of 1.610%, down from 1.630% last week. An additional $14 billion was sold in six-month bills at a rate of 1.580%, down from 1.635%.

Both the three-month and six-month rates were the lowest since Aug. 5 when the bills sold for 1.600% and 1.555%, respectively.

The new discount rates understate the actual return to investors--1.639% for three-month bills with a $10,000 bill selling for $9,959.30 and 1.615% for a six-month bill selling for $9,920.10.

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 1.80% last week from 1.81% the previous week.