The Treasury sold $6.4 billion in new...

The Treasury sold $6.4 billion in new three-month bills at an average discount rate of 6.79%, up from 6.59% at the last regular weekly auction. Another $6.4 billion was sold in new six-month bills at an average discount rate of 7.07%, up from 6.83%. The rates were the highest since three-month bills sold for 6.92% March 3, 1986, and six-month bills averaged 7.23% Feb. 10, 1986. The new discount rates understate the actual return to investors--7.01% for three-month bills, with a $10,000 bill selling for $9,849.10, and 7.44% for six-month bills selling for $9,664.20. The auction had originally been scheduled for Sept. 21 but had to be postponed because of Congress’ failure to pass legislation increasing the government’s borrowing authority. The discount rate reflects the price discount received when government securities are purchased at less than face value.