Interest rates on short-term Treasury securities rose...

Interest rates on short-term Treasury securities rose to the highest levels since mid-January. The Treasury Department sold $6.4 billion in three-month bills at an average discount rate of 5.98%, up from 5.69% last week. Another $6.4 billion was sold in six-month bills at an average discount rate of 6.21%, up from 6% last week. The rates were the highest since Jan. 19, when three-month bills sold for an identical 5.98% and six-month bills averaged 6.37%. The new discount rates understate the actual return to investors--6.16% for three-month bills, with a $10,000 bill selling for $9,848.80, and 6.5% for a six-month bill selling for $9,686.10. The average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, was 6.78% last week, virtually unchanged from 6.77% the previous week.