CALIFORNIA : BRIEFLY / THE ECONOMY : Treasury Bill Rates Decline at Auction

The Treasury Department sold $6.5 billion in three-month bills at a discount rate of 4.720%, down from 4.875% last week. An additional $7.5 billion was sold in six-month bills at a rate of 4.950%, down from 4.990%. The new discount rates understate the actual return to investors: 4.856% for three-month bills, with a $10,000 bill selling for $9,880.70, and 5.161% for a six-month bill selling for $9,749.80. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 5.29% last week from 5.19% the previous week. An auction of two-year notes is tentatively scheduled for Sept. 29.