Interest rates on short-term Treasury bills rose.

The Treasury Department sold $6.6 billion in new three-month bills at an average discount rate of 5.81%, up from 5.79% last week. Another $6.6 billion was sold in new six-month bills at an average discount rate of 6.16%, up from 6.14% last week. The rates were the highest since three-month bills averaged 5.98% on April 13 and since six-month bills sold for 6.18% on June 16, 1986. The new discount rates understate the actual return to investors--6% for three-month bills, with a $10,000 bill selling for $9,853.10, and 6.46% for six-month bills selling for $9,688.60. The discount rate reflects the price discount received when government securities are purchased at less than face value.