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 6.96%, up from 6.49% last week. Another $6.4 billion was sold in six-month bills at an average discount rate of 7.34%, up from 6.96% last week. The rates on three-month bills were the highest since Feb. 24, 1986, when they also sold for 6.96%. The rates on six-month bills were the highest since Oct. 28, 1985, when they averaged 7.37%. The new discount rates understate the actual return to investors--7.20% for three-month bills, with a $10,000 bill selling for $9,824.10, and 7.75% for six-month bills selling for $9,628.90. The discount rate reflects the price discount received when government securities are purchased at less than face value.