Rates Fall in Short-Term Treasury Auction

The Treasury Department sold $10 billion in three-month bills at a discount rate of 4.37%, down from 4.52% last week. An additional $8 billion was sold in six-month bills at a rate of 4.22%, down from 4.42%. The new discount rates understate the actual return to investors--4.482% for three-month bills with a $10,000 bill selling for $9,889.50 and 4.371% for a six-month bill selling for $9,786.70. In a separate report, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, fell to 4.31% last week from 4.47% the previous week.