Rates for 3- and 6-Month T-Bills Decline

The Treasury Department sold $10.7 billion at auction in three-month bills at an average discount rate of 4.88%, down from 4.94% last week. An additional $10 billion was sold in six-month bills at an average rate of 5.10%, down from 5.20%. The three-month-bill rate is the lowest since the 4.76% of Dec. 16. The six-month rate is the lowest since the 5.03% of Feb. 24. The new discount rates understate the actual rate of return to investors: 5.01% for three-month bills, with a $10,000 bill selling for $9,876.60, and 5.31% for a six-month bill selling for $9,742.20. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.72% last week from 5.76% the week before. The next auction of 52-week Treasury bills will be Thursday; two-year notes will be auctioned June 24; five-year notes, June 25. The conventional 10-year note will not be offered for July and October.