A、the bonds are very popular with ordinary people. B、they are encouraged to finance the public debt. C、other market interest rat

The Treasury Department announced today that it is lowering the guaranteed interest rate on some U. S. savings bonds. The 1.5 point decline to 6% came as no surprise to investors. The Treasury said it is lowering the rate on savings bonds to bring it in line with other market interest rates which have been falling all year. For in stance, money market mutual funds are now yielding just over 5%; five-year treasury notes are trading at about 6.5%. So the government has been paying a premium to people buying savings bonds, and it’s turned out to be an expensive way to finance the public debt. The relatively generous rate on the bonds have made them very popular in the past few months. Since the beginning of August, sales have been about double the usual pace. And this week, the rush to buy savings bonds intensified because of reports that the Treasury was going to cut the rate any day, and people wanted to lock in the old rate. Savings bonds bought before tomorrow, the day the cut goes into effect, will still yield 7.5%.