Yields on short-term government bonds rose.
At its weekly auction, the Treasury sold $6.85 billion in three-month bills at an average discount rate of 7.87%, up from 7.62% a week earlier. Another $6.85 billion in six-month bills was sold at an average discount rate of 8.11%, up from 7.87%. Although reversing several weeks of decline, the latest interest rates remained below the levels of two weeks ago, when three-month bills went for 8.04% and six-month bills for 8.27%. The new discount rates understate the actual return to investors--8.14% for three-month bills and 8.57% for six-month bills.