Short-Term T-Bill Rates Rise

The Treasury Department sold $11.6 billion in three-month bills at an average discount rate of 5.26%, up from 5.13% last week. An additional $11.5 billion was sold in six-month bills at an average rate of 5.33%, up from 5.26%. The three-month bill rate is the highest since they sold for 5.30% on Dec. 11, 1995. The six-month bill rate is the highest since they averaged 5.38% on Sept. 3. The new discount rates understate the actual return to investors: 5.41% for three-month bills, with a $10,000 bill selling for $9,867.00, and 5.55% for a six-month bill selling for $9,730.50. 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 5.81% last week from 5.72% the previous week.