Short-term T-bill rates fall in sale

The Treasury Department auctioned $18 billion in three-month bills at a discount rate of 3.900%, down from 4.185% last week. Also, $16 billion in six-month bills was auctioned at a discount rate of 3.990%, down from 4.225% last week.

The new rates understate the actual return to investors -- 4.004% for the three-month bills, with a $10,000 bill selling for $9,901.42 and 4.14% for a six-month bill selling for $9,798.28.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 4.14% last week, down from 4.24% the previous week.