Rates on Short-Term T-Bills Fall in Auction

The Treasury Department auctioned $18 billion in three-month bills at a discount rate of 4.815%, down from 4.820% last week. An additional $16 billion in six-month bills was auctioned at a discount rate of 4.920%, down from 4.935% last week.

The new discount rates understate the actual return to investors -- 4.942% for three-month bills, with a $10,000 bill selling for $9,878.29, and 5.116% for a six-month bill selling for $9,751.27.

Separately, the Federal Reserve said that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was unchanged last week at 5.02%, the same as the previous week.