The Treasury sold $7 billion of new...

The Treasury sold $7 billion of new three-month bills at an average discount rate of 7.26%, up from 7.18% last week. Another $7 billion of new six-month bills was sold at an average discount rate of 7.50%, down from 7.51% last week. The rates on three-month bills were the highest Aug. 5, 1985, when they sold for 7.30%. Six-month bill rates were the lowest since Aug. 8, when they averaged 7.26%. The new discount rates understate the actual return to investors--7.50% for three-month bills, with a $10,000 bill selling for $9,816.50, and 7.90% for six-month bills selling for $9,620.80. The discount rate reflects the price discount received when government securities are purchased at less than face value.