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YIELDS DECLINE ON TREASURY BILLS

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

The Treasury Department sold $14 billion in three-month bills at a discount rate of 2.170 percent, down from 2.200 percent last week. An additional $13 billion was sold in six-month bills at a rate of 2.130 percent, down from 2.160 percent.

The three-month rate was the lowest since Dec. 23, 1960, when the bills sold for 2.148 percent. The six-month rate was the lowest on record.

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

Separately, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable rate mortgages, was 2.37 percent, down from 2.39 percent.

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