Interest rates on short-term T-bills rose slightly.
The Treasury Department sold $7 billion in new three-month bills at an average discount rate of 6.08%, up from 5.86% last week. Another $7 billion was sold in new six-month bills at an average discount rate of 6.14%, up from 5.87% last week. The new discount rates understate the actual return to investors--6.26% for three-month bills and 6.42% for six-month bills selling for $9,689.60. The discount rate reflects the price discount received when government securities are purchased at less than face value. In a separate report, the Federal Reserve Board said the average interest rate for one-year Treasury bills was 6.46% last week, up slightly from 6.21% the week before. This interest rate is closely watched because many adjustable rate mortgages are tied to changes in this index.