Rate on Three-Month T-Bills Slips in Auction

The Treasury Department auctioned $15 billion in three-month bills at a discount rate of 4.925%, down from 4.955% last week. An additional $14 billion in six-month bills was auctioned at a discount rate of 5.105%, up from 5.090% last week.

The new discount rates understate the actual return to investors -- 5.056% for three-month bills, with a $10,000 bill selling for $9,875.51, and 5.313% for a six-month bill selling for $9,741.91.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, was unchanged last week at 5.27%.