Interest Rates Fall in Treasury Bill Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.1%, down from 1.15% last week. An additional $17 billion was sold in six-month bills at a rate of 1.09%, down from 1.15%.

Three-month and six-month rates were the lowest since March 10, when the bills sold for 1.055% and 1.03%, respectively.

The new discount rates understate the actual return to investors -- 1.121% for three-month bills, with a $10,000 bill selling for $9,972.20, and 1.114% for a six-month bill selling for $9,944.90.

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 1.27% last week from 1.32% the previous week.