Rates on Treasury Bills Are Mixed

The Treasury Department sold $7.26 billion in three-month bills at an average discount rate of 5.03%, up from 4.99% last week. An additional $7.25 billion was sold in six-month bills at an average rate of 4.99%, down from 5.03%. The three-month rate was the highest since March 2, when the bills sold for 5.12%. The six-month rate was the lowest since Jan. 12, when the average was 4.91%. The new discount rates understate the actual return to investors: 5.16% for three-month bills, with a $10,000 bill selling for $9,872.90, and 5.19% for a six-month bill selling for $9,744.70. Upcoming auctions are scheduled tentatively today for two-year notes and Wednesday for five-year notes. 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, fell to 5.36% last week from 5.37% the previous week.