Short-Term Rates Rise in Treasury Auction

The Treasury Department sold $5.77 billion in three-month bills at an average discount rate of 4.98%, up from 4.92% last week. An additional $7.31 billion was sold in six-month bills at an average rate of 5.03%, up from 5.02%. The three-month rate is the highest since June 29, when the bills sold for 5%. The six-month rate is the highest since July 20, when the average was 5.05%. The new discount rates understate the actual return to investors: 5.12% for three-month bills, with a $10,000 bill selling for $9,874.10, and 5.23% for a six-month bill selling for $9,745.70. Upcoming auctions are as scheduled: five-year notes on Aug. 11; 10-year notes on Aug. 12; 30-year bonds on Aug. 13; and two-year notes on Aug. 26. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.37% last week from 5.36% the week before.