Short-term T-bill rates fall in sale

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 3.55%, down from 3.92% last week. An additional $18 billion in six-month bills was auctioned at a discount rate of 3.78%, down from 3.945% last week.

The new discount rates understate the actual return to investors -- 3.642% for the three-month bills, with a $10,000 bill selling for $9,910.26, and 3.918% for a six-month bill selling for $9,808.90.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 3.93% last week from 3.97% the previous week.