Short-Term Rates Fall in Treasury Auction

The Treasury Department sold $19 billion in three-month bills at a discount rate of 0.93%, down from 0.94% last week. An additional $17 billion was sold in six-month bills at 0.975%, down from 0.99%.

The three-month rate was the lowest since Feb. 17, when the bills sold for 0.915%. The six-month rate was the lowest since Jan. 26, when it was 0.955%.

The new discount rates understate the actual return to investors -- 0.945% for three-month bills, with a $10,000 bill selling for $9,976.50, and 0.994% for a six-month bill selling for $9,950.70.

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, edged up to 1.23% last week from 1.22% the previous week.