Interest Rates Fall in Treasury Bill Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 0.88%, down from 0.89% last week. An additional $18 billion was sold in six-month bills at 0.93%, down from 0.94%.

The rates were the lowest since June 23, when the bills sold for 0.815% and 0.84%, respectively. The rates understate the actual return to investors -- 0.895% for three-month bills, with a $10,000 bill selling for $9,977.80, and 0.95% for a six-month bill selling for $9,953.00.

Separately, the Federal Reserve said the average yield for one-year constant-maturity T-bills, the most popular index for making changes in adjustable-rate mortgages, edged up to 1.08% last week from 1.07% the previous week.