Treasury Rates Decline in Auction

The Treasury Department sold $18 billion in three-month bills at a discount rate of 1.320%, down from 1.355% last week. An additional $16 billion was sold in six-month bills at a rate of 1.630%, down from 1.725%.

The three-month rate was the lowest since June 21, when the bills sold for 1.315%. The six-month rate was the lowest since June 7, when it was 1.505%. The new discount rates understate the actual return to investors -- 1.344% for three-month bills with a $10,000 bill selling for $9,966.60, and 1.666% for a six-month bill selling for $9,917.60.

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, dipped to 2.14% last week from 2.16% the previous week.