Short-Term Treasury Rates Fall

The Treasury Department sold $7.27 billion in three-month bills at an average discount rate of 5.070%, down from 5.150% last week. An additional $7.26 billion was sold in six-month bills at an average rate of 5.175%, down from 5.270%. The three-month bills’ rate was the lowest since they sold for 4.97% on Oct. 27. The six-month bills’ rate was the lowest since they sold for 5.165% on Nov. 17. The new discount rates understate the actual return to investors: 5.209% for three-month bills, with a $10,000 bill selling for $9,871.80, and 5.387% for a six-month bill selling for $9,738.40. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.53% last week from 5.54% the previous week. The next auction of two-year notes will be Dec. 22 and five-year notes on Dec. 23.