Treasury Bill Rates Fall in Auction

The Treasury Department sold $12 billion in three-month bills at a discount rate of 2.18%, down from 2.32% last week. An additional $11 billion in six-month bills was sold at a rate of 2.15%, down from 2.325%.

The three-month rate was the lowest since Aug. 1, 1960, when the bills sold for 2.131%. The six-month rate was the lowest ever recorded.

The new discount rates understate the actual return to investors--2.222% for three-month bills with a $10,000 bill selling for $9,944.90 and 2.204% for a six-month bill selling for $9,891.30.

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 2.40% last week from 2.49% the previous week.