Short-Term T-Bill Rates Rise

The Treasury Department sold $11.6 billion in three-month bills at an average discount rate of 5.13%, up from 5.06% last week. An additional $11.6 billion was sold in six-month bills at an average rate of 5.26%, up from 5.18%. The rates were the highest since Sept. 23, when the three-month bill sold for 5.18% and the six-month rate averaged 5.30%. The new rates understate the actual return to investors: 5.27% for three-month bills, with a $10,000 bill selling for $9,870.30, and 5.48% for a six-month bill selling for $9,734.10. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 5.72% last week from 5.70% the previous week. The next auction of two-year notes will be held March 25, and the next auction of five-year notes is set for March 26.