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

Interest rates on short-term Treasury securities rose in Monday’s auction to the highest level in more than 3 1/2 years. The Treasury Department sold $7.2 billion in three-month bills at an average discount rate of 8.14%, up from 7.98% last week. Another $7.2 billion was sold in six-month bills at an average discount rate of 8.29%, up from 8.21% last week. The rates were the highest since three-month bills sold for 8.18% on April 1, 1985, and six-month bills averaged 8.56 on April 8, 1985. The new discount rates understate the actual return to investors--8.43% for three-month bills, with a $10,000 bill selling for $9,794.20, and 8.77% for six-month bills selling for $9,580.90. The discount rate reflects the price discount received when government securities are purchased at less than face value.