Interest rates on short-term Treasury bills fell.

The Treasury Department sold $7.4 billion in new three-month bills at an average discount rate of 5.99%, down from 6.09% last week. Another $7.4 billion was sold in new six-month bills at an average discount rate of 5.96%, down from 6.13% last week. The new discount rates understate the actual return to investors--6.17% for three-month bills and 6.23% for six-month bills. The discount rate reflects the price discount received when government securities are purchased at less than face value. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills was 6.54% last week, down from 6.61% in the previous week.