Rates for Short-Term T-Bills Increase

The Treasury Department sold $13 billion in three-month bills at an average discount rate of 4.92%, up from 4.76% last week. An additional $13.1 billion was sold in six-month bills at an average rate of 5.08%, up from 4.99%. The three-month bill rate was the highest since they sold for 4.98% on Dec. 2. The six-month bill rate was the highest since they averaged 5.15% on Oct. 28. The new discount rates understate the actual return to investors--5.05% for three-month bills with a $10,000 bill selling for $9,875.60 and 5.29% for a six-month bill selling for $9,743.20. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills rose to 5.51% last week from 5.46% the previous week. The next auction of two-year notes will be Jan. 21, and five-year notes on Jan. 22.