Short-Term Rates Fall in Treasury Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 0.915%, down from 0.93% last week. An additional $13 billion was sold in six-month bills at 1.025%, down from 1.03%.

The three-month rate was the lowest since Jan. 26, when the bills sold for 0.89%. The six-month rate was the lowest since March 29, when it was 0.99%.

The new rates understate the actual return to investors -- 0.929% for three-month bills, with a $10,000 bill selling for $9,976.90, and 1.044% for a six-month bill selling for $9,948.20.

In a separate report, the Federal Reserve said the average yield for one-year constant-maturity Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 1.32% last week from 1.23% the previous week.