Rates Fall on Short-Term Treasuries

The Treasury Department sold $12.1 billion in three-month bills at an average discount rate of 5.08%, down from 5.17% last week. An additional $11.6 billion was sold in six-month bills at an average rate of 5.12%, down from 5.23%. The three-month bill rate is the lowest since they sold for 5.05% on July 14. The six-month bill rate is the lowest since they averaged 5.09%, also on July 14. The new discount rates understate the actual return to investors--5.22% for three-month bills with a $10,000 bill selling for $9,871.60 and 5.33% for a six-month bill selling for $9,741.20. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.59% last week from 5.55% the previous week. The next auction of two-year notes will be Aug. 26; five-year notes on Aug. 27.