Rates Decline in Treasury Bill Auction

THE ECONOMY

The Treasury Department sold $15 billion in three-month bills at a discount rate of 0.87%, down from 0.885% last week. An additional $14 billion was sold in six-month bills at 0.97%, down from 0.98%.

The three-month rate was the lowest since June 23, when the bills sold for 0.815%. The six-month rate was the lowest since July 21, when the rate was 0.95%.

The new discount rates understate the actual return to investors -- 0.884% for three-month bills, with a $10,000 bill selling for $9,978.30, and 0.992% for a six-month bill selling for $9,951.20.

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, fell to 1.27% last week from 1.31% the previous week.

From Associated Press