Rates of Short-Term Treasury Bills Rise

The Treasury Department sold $11.3 billion in three-month bills at an average discount rate of 4.98%, up from 4.93% last week. An additional $11.1 billion was sold in six-month bills at an average rate of 5.12%, up from 5.01%. The rates were the highest since Sept. 8, when three-month bills sold for 5.01% and six-month bills averaged 5.14%. The new discount rates understate the actual return to investors: 5.11% for three-month bills, with a $10,000 bill selling for $9,874.10, and 5.33% for a six-month bill selling for $9,741.20. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills was 5.45% last week, the same as the previous week. The next auction of two-year notes will be Oct. 28 and five-year notes Oct. 29.