Interest rates on short-term Treasury bills rose.

The Treasury sold $7.6 billion in new three-month bills at an average discount rate of 5.86%, up from 5.72% last week. Another $7.6 billion was sold in new six-month bills at an average discount rate of 5.89%, up from 5.77% last week. The rates were the highest since June 30, when three-month bills were auctioned at 5.99% and six-month bills sold for 5.96%. The new discount rates understate the actual return to investors--6.03% for three-month bills and 6.16% for six-month bills. The discount rate reflects the price discount received when government securities are purchased at less than face value.

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