BANKING & FINANCE - May 16, 1995

Short-Term T-Bill Rates at 2-Week High: The Treasury Department sold $13.3 billion in three-month bills at an average discount rate of 5.71%, up from 5.63% last week. Another $13.3 billion was sold in six-month bills at an average discount rate of 5.69%, up from 5.65%. The three-month bill rate is the highest since they sold for 5.74% on May 1. The six-month bill rate is the highest since they averaged 5.84% that day. The new discount rates understate the actual return to investors: 5.89% for three-month bills, with a $10,000 bill selling for $9,855.70, and 5.96% for a six-month bill selling for $9,712.30. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 6% last week from 6.15% the previous week.