Rates Mixed on Short-Term T-Bills

The Treasury Department sold $13.1 billion in three-month bills at an average discount rate of 5.02%, up from 5.00% last week. An additional $13.2 billion was sold in six-month bills at an average rate of 5.07%, down from 5.08%. The three-month bill rate was the highest since they sold for 5.06% on Jan. 27. The six-month bill rate was the lowest since they averaged 4.99% on Dec. 16. The new discount rates understate the actual return to investors: 5.16% for three-month bills, with a $10,000 bill selling for $9,873.10, and 5.28% for a six-month bill selling for $9,743.70. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.53% last week from 5.62% the previous week. Today the Treasury begins the auction of $39.75 billion in new debt with the auction of three-year notes. Ten-year notes will be auctioned Feb. 12, 30-year notes on Feb. 13, two-year notes on Feb. 25 and five-year notes on Feb. 28.