Rates Mixed on Short-Term Treasuries

The Treasury Department sold $14.1 billion in three-month bills at an average discount rate of 5.04%, unchanged from last week. Another $14.1 billion in six-month bills were sold at an average rate of 5.08%, down from 5.15%. The three-month bill rate was the highest since they sold for 5.18% on Sept. 23. The six-month bill rate was the lowest since they averaged 5.07% on Oct. 7. The new discount rates understate the actual return to investors: 5.18% for three-month bills, with a $10,000 bill selling for $9,872.60, and 5.29% for a six-month bill selling for $9,743.20. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.48% last week from 5.56% the previous week. The next auction of three-year notes is today. Auction of the October 10-year note will be reopened Wednesday as a 9-year, 11-month note.