Interest Rates Drop in Treasury Bill Auction

Interest rates on short-term Treasury securities fell at auction, with six-month bills reaching their lowest rate ever.

The Treasury Department sold $14 billion in three-month bills at a discount rate of 2.17%, down from 2.2% last week. An additional $13 billion was sold in six-month bills at a rate of 2.13%, down from 2.16%.

The three-month rate was the lowest since Dec. 23, 1960, when the bills sold for 2.148%.

The new discount rates understate the actual return to investors--2.214% for three-month bills, with a $10,000 bill selling for $9,945.10, and 2.183% for a six-month bill selling for $9,892.30.