Rates on Short-Term T-Bills Fall in Auction

The Treasury Department auctioned $16 billion in three-month bills at a discount rate of 2.8%, down from 2.85% last week. An additional $14 billion in six-month bills was auctioned at a discount rate of 3.07%, down from 3.12% last week.

The new discount rates understate the actual return to investors -- 2.859% for three-month bills with a $10,000 bill selling for $9,929.22 and 3.162% for a six-month bill selling for $9,844.79.

In a separate report, the Federal Reserve said the average yield for one-year Treasury bills rose to 3.35% last week, up from 3.33% the previous week.