Interest Rates Fall in T-Bill Auction

Interest rates on short-term Treasury bills declined in the latest auction with the three-month rate falling to the lowest level since 1958.

The Treasury Department auctioned $16 billion in three-month bills at a discount rate of 1.18%. An additional $15 billion in six-month bills was auctioned at a discount rate of 1.23%.

The three-month rate was down from 1.185% last week. The six-month rate was down from 1.24% last week and was the lowest since 1.22% on Dec. 30.

The new discount rates understate the actual return to investors -- 1.199% for three-month bills, with a $10,000 bill selling for $9,970.20, and 1.255% for a six-month bill selling for $9,937.80.

In a separate report, the Federal Reserve said the average yield for one-year Treasury bills rose to 1.41% last week from 1.38% the previous week.