Interest rates on short-term T-bills rose again.

The Treasury Department sold $6.7 billion in new three-month bills at an average discount rate of 5.72%, up from 5.58% last week. An additional $6.8 billion was sold in new six-month bills at an average discount rate of 5.69%, up from 5.59% last week. The rates were the highest since three-month bills averaged 5.86% on July 28 and six-month bills sold for 5.73% on Aug. 4. The new discount rates understate the actual return to investors--5.88% for three-month bills, with a $10,000 bill selling for $9,855.40, and 5.94% for six-month bills selling for $9,712.30. The discount rate reflects the price discount received when government securities are purchased at less than face value.

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