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T-bill Rates Rise: The Treasury sold $7.2...

T-bill Rates Rise: The Treasury sold $7.2 billion of new three-month bills at an average discount rate of 8.73%, up from 8.51% last week. Another $7.2 billion of new six-month bills was sold at an average discount rate of 8.77%, up from 8.5% last week. The rates were the highest since three-month bills sold for 8.82% on Nov. 5, 1984, and six-month bills averaged 8.86% on March 3, 1985. The new discount rates understate the actual return to investors--9.05% for three-month bills, with a $10,000 bill selling for $9,779.30, and 9.3% for a six-month bill selling for $9,556.60. The discount rate reflects the price discount received when government securities are purchased at less than face value.


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