Short-Term Treasury Rates Fall

The Treasury Department sold $7.57 billion in three-month bills at an average discount rate of 5.08%, down from 5.14% last week. An additional $7.59 billion was sold in six-month bills at an average rate of 5.30%, down from 5.37%. The three-month bill rate is the lowest since they sold for 5.06% on March 10. The six-month bill rate is the lowest since they averaged 5.26% on March 17. The new discount rates understate the actual return to investors: 5.22% for three-month bills, with a $10,000 bill selling for $9,871.60, and 5.52% for six-month bills, with a $10,000 bill selling for $9,732.10. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.90% last week from 5.93% the previous week. The next auction of one-year notes is May 22; two-year notes, May 28; and five-year notes, May 29.