Short-term Treasury bill rates drop

The Treasury Department auctioned $14 billion in three-month bills at a discount rate of 4.640%, down from 4.710% last week. An additional $14 billion in six-month bills was auctioned at a discount rate of 4.765%, down from 4.790% last week.

The new discount rates understate the actual return to investors -- 4.773% for the three-month bills, with a $10,000 bill selling for $9,882.71, and 4.964% for a six-month bill selling for $9,759.10.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged up to 4.98% last week from 4.96% the previous week.