Rates on Short-Term Treasury Bills Fall

Interest rates on short-term Treasury securities fell in auction. The Treasury Department sold $11.3 billion in three-month bills at an average discount rate of 4.91%, down from 5.01% last week. An additional $11 billion was sold in six-month bills at an average rate of 5.08%, down from 5.14%. The rate for three-month bills was the lowest since they sold for 4.88% on June 16. The six-month-bill rate was the lowest since they averaged 5.07% on July 7. The new discount rates understate the actual return to investors: 5.04% for three-month bills, with a $10,000 bill selling for $9,875.90, and 5.29% for a six-month bill selling for $9,743.20. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.59% last week from 5.58% the previous week. The T-bill auction results and the Fed report were released Monday but were omitted from Tuesday’s editions.