Treasury Note Yields Jump

Yields on three-year Treasury notes rose in Monday’s auction to the highest level in six months as the government began its $37-billion quarterly refunding.

The average yield was 5.17%, up from 4.69% at the last auction Aug. 11. It was the highest rate since three-year notes averaged 5.96% on May 5.

The notes will carry a coupon interest rate of 5.125%, with each $10,000 in face value selling for $9,987.70.

A total of $15.56 billion in notes was sold out of bids totaling $36.12 billion.

The refunding continues today with the sale of $11.25 billion in 10-year notes and concludes Thursday with an offering of $10.25 billion in 30-year bonds.

The auctions are held four times a year to replenish government coffers drained by huge deficits.