Rates on Shorter-Term T-Bills Rise at Auction

The Treasury Department sold $9 billion in three-month bills at a discount rate of 5.21%, up from 5.05% last week. An additional $8 billion was sold in six-month bills at a rate of 5.410%, up from 5.290%. The new discount rates understate the actual return to investors--5.368% for three-month bills, with a $10,000 bill selling for $9,868.30, and 5.655% for a six-month bill selling for $9,726.50. 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, fell to 5.69% last week from 5.73% the previous week.