Interest Rates Dip on Short-Term Treasuries

The Treasury Department sold $8.5 billion in three-month bills at a discount rate of 5.810%, down from 6.065% last week. An additional $7.5 billion was sold in six-month bills at a rate of 6.125%, down from 6.250%. The new discount rates understate the actual return to investors--5.980% for three-month bills, with a $10,000 bill selling for $9,853.10, and 6.411% for a six-month bill selling for $9,688.60. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, rose to 6.4% last week from 6.38% the previous week. The next auction of two-year notes is Wednesday.