Treasury bill rates fall at auction

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 3.8%, down from 4.35% last week. An additional $15 billion in six-month bills was auctioned at 4.02%, down from 4.38% last week.

The new discount rates understate the actual return to investors: 3.901% for three-month bills, with a $10,000 bill selling for $9,903.94, and 4.172% for a six-month bill selling for $9,796.77.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 4.27% last week from 4.3% the previous week.