Short-Term Rates Decline in Treasury Auction

The Treasury Department sold $11 billion in three-month bills at a discount rate of 4.9%, down from 4.92% last week. An additional $10 billion was sold in six-month bills at a rate of 4.745%, down from 4.755%. The new discount rates understate the actual return to investors--5.032% for three-month bills with a $10,000 bill selling for $9,876.10, and 4.929% for a six-month bill selling for $9,760.10. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills rose to 4.72% last week from 4.66% the previous week.