Rates on Short-Term T-Bills Fall in Auction

The Treasury Department auctioned $21 billion in three-month bills at a discount rate of 4.5%, down from 4.51% last week. Six-month bills totaling $19 billion were auctioned at a discount rate of 4.6%, up from 4.58% last week.

The new discount rates understate the actual return to investors -- 4.615% for three-month bills, with a $10,000 bill selling for $9,886.25, and 4.775% for a six-month bill selling for $9,767.44.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 4.74% last week from 4.72% the previous week.