Rates Decline in Treasury Bill Auction

The Treasury Department sold $15 billion in three-month bills at a discount rate of 0.935%, down from 0.97% last week. An additional $15 billion in six-month bills was sold at 1.01%, down from 1.04%.

The three-month rate was the lowest since July 21, when the bills sold at 0.895%. The six-month rate was the lowest since July 28, when it was 0.98%.

The rates understate the actual return to investors -- 0.951% for three-month bills, with a $10,000 bill selling for $9,976.40, and 1.033% for a six-month bill selling for $9,948.90.

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 1.33% last week from 1.35% the previous week.