Short-Term Treasury Bill Rates Decline

Interest rates on short-term Treasury securities fell in auction as the Treasury Department sold $7.55 billion in three-month bills at an average discount rate of 5.03%, down from 5.17% last week. An additional $7.53 billion was sold in six-month bills at an average rate of 5.26%, down from 5.35%.The three-month bill rate was the lowest since they sold for 5.01% on Feb. 24. The six-month bill rate was lowest since the 5.18% of March 10. The new discount rates understate the actual return to investors: 5.16% for three-month bills, with a $10,000 bill selling for $9,872.90, and 5.48% for a six-month bill selling for $9,732.60. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, fell to 5.85% last week from 5.86% the previous week.