The Treasury sold $7.1 billion of new...

The Treasury sold $7.1 billion of new three-month bills at an average discount rate of 7.36%, up from 7.32% last week. Another $7 billion of new six-month bills were sold at an average discount rate of 7.55%, up from 7.46% last week. The rates were the highest since May 13, 1985, when three-month bills sold for 7.69% and six-month bills averaged 7.90%. The new discount rates understate the actual return to investors--7.60% for three-month bills, with a $10,000 bill selling for $9,814, and and 7.96% for six-month bills selling for $9,618.30. The discount rate reflects the price discount received when government securities are purchased at less than face value.