T-Bill Rates Rise at Auction

The Treasury Department sold $7.26 billion in three-month bills at an average discount rate of 5.07%, up from 4.98% last week. An additional $7.26 billion worth of six-month bills was sold at an average rate of 5.02%, up from 4.99%. The rates were the highest since Jan. 5, when three-month bills sold for 5.11% and six-month bills averaged 5.13%. The new discount rates understate the actual return to investors: 5.21% for three-month bills, with a $10,000 bill selling for $9,871.80, and 5.23% for a six-month bill selling for $9,746. Separately, the Federal Reserve Board said the average yield for one-year T-bills rose to 5.22% last week from 5.18% the previous week. The next auction of two-year notes will be today; five-year notes will be sold Wednesday.