Rates for Treasury Bills Decline

The Treasury Department sold $7.5 billion in three-month bills at a discount rate of 4.38%, down from 4.52% last week. An additional $7.51 billion was sold in six-month bills at a rate of 4.42%, down from 4.53%. The three-month rate is the lowest since Dec. 7, when the bills sold for 4.32%. The six-month rate is the lowest since Dec. 14, when the rate was 4.39%. The new discount rates understate the actual return to investors: 4.49% for three-month bills, with a $10,000 bill selling for $9,889.30, and 4.59% for a six-month bill selling for $9,776.50. Separately, the Federal Reserve reported that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, fell to 4.59% last week from 4.63% the week before. The Treasury is scheduled to auction $8 billion in inflation-indexed 10-year notes on Wednesday.