Interest Rates on Treasury Bills Fall

The Treasury Department sold $18 billion in three-month bills at a discount rate of 1.005%, down from 1.110% last week. An additional $18 billion was sold in six-month bills at a rate of 0.980%, down from 1.095%.

The new discount rates, the lowest since 1958, understate the actual return to investors -- 1.024% for three-month bills with a $10,000 bill selling for $9,974.60 and 1.000% for a six-month bill selling for $9,950.50.

In a separate report, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 1.08% last week from 1.13% the previous week.