Interest rates fell on short-term Treasury bills.

The Treasury Department sold $6.4 billion in three-month bills at an average discount rate of 5.70%, down from 6.03% last week. Another $6.4 billion was sold in six-month bills at an average discount rate of 6.18%, down from 6.34% last week. The rates were the lowest since May 11 when three-month bills sold for 5.47% and six-month bills averaged 5.74%. The new discount rates understate the actual return to investors--5.88% for three-month bills, with a $10,000 bill selling for $9,855.90, and 6.49% for six-month bills selling for $9,685.90.