Rates for Short-Term Treasuries Rise

The Treasury Department sold $7.26 billion in three-month bills at an average discount rate of 5.295%, up from 5.07% last week. An additional $7.27 billion was sold in six-month bills at an average rate of 5.315%, up from 5.175%. 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 5.35% on May 19, 1997. The new discount rates understate the actual return to investors--5.442% for three-month bills, with a $10,000 bill selling for $9,867.60, and 5.536% for a six-month bill selling for $9,732.80. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.49% last week from 5.53% the week before. The next auction of five-year notes is today.