Interest rates on short-term Treasury bills rose.

The Treasury Department sold $6.7 billion in three-month bills at an average discount rate of 5.82%, up from 5.64% last week. An additional $6.6 billion was sold in six-month bills at an average discount rate of 6.0%, up from 5.93% last week. The rates were the highest since three-month bills sold for 6.03% on May 18 and six-month bills averaged 6.10% on June 1. The new discount rates understate the actual return to investors--6.0% for three-month bills, with a $10,000 bill selling for $9,852.90, and 6.29% for six-month bills selling for $9,696.70. The discount rate reflects the price discount received when government securities are purchased at less than face value.