Short-Term Treasury-Bill Rates Rise

The Treasury Department sold $7.08 billion in three-month bills at an average discount rate of 5.22%, up from 5.21% last week. An additional $7.03 billion was sold in six-month bills at an average rate of 5.45%, up from 5.38%. The three-month bill rate was the highest since they sold for 5.26% on March 24. The six-month bill rate was the highest since they averaged 5.46% on July 24, 1995. The new discount rates understate the actual return to investors--5.36% for three-month bills with a $10,000 bill selling for $9,868.10, and 5.68% for a six-month bill selling for $9,724.50. 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 6.01% last week from 5.98% the previous week.