Short-Term T-Bill Rates Decline

Interest rates on short-term Treasury securities fell in auction. The Treasury Department sold $7.5 billion in three-month bills at an average discount rate of 4.93%, down from 5.03% last week. Another $7.5 billion was sold in six-month bills at an average rate of 5.22%, down from 5.26%. The three-month bill rate is the lowest since they sold for 4.92% on Dec. 23. The six-month bill rate is the lowest since they averaged 5.18% on March 10. The new discount rates understate the actual return to investors: 5.06% for three-month bills, with a $10,000 bill selling for $9,875.40, and 5.44% for a six-month bill selling for $9,736.10. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 5.86% last week from 5.85% the week before.(Associated Press)