Short-Term T-Bill Rates Hit a 2-Year Low

Interest rates on short-term Treasury securities fell at auction to their lowest point in more than two years. The Treasury Department sold $9 billion in three-month bills at a discount rate of 4.125%, down from 4.200% last week. An additional $8 billion was sold in six-month bills at a rate of 4.020%, down from 4.120%. The three-month rate was the lowest since Oct. 26, 1998, when the bills sold for 4.070%. The six-month rate was the lowest since Oct. 19, 1998, when the rate was 3.865%. The new discount rates understate the actual return to investors--4.228% for three-month bills with a $10,000 bill selling for $9,895.70, and 4.160% for a six-month bill selling for $9,796.80. The next auction of two-year notes will be April 25; five-year notes on May 8; and 9-year, 9-month notes on May 9. In a separate report, the Federal Reserve said the average yield for one-year constant-maturity Treasury bills rose to 4.19% last week from 4.17% the previous week.