Interest Rates Rise in Treasury Bill Auctions

Interest rates on short-term Treasury securities rose to their highest level since September. The Treasury Department sold $8 billion in three-month bills at a discount rate of 4.47%, up from 4.43% last week, and an additional $8 billion in six-month bills at a rate of 4.50%, up from 4.36%. It also sold $11 billion in one-year bills at a rate of 4.40%, up from 4.06% at the previous auction Oct. 13. The three- and six-month rates were the highest since Sept. 21, when three-month bills sold at 4.64% and the six-month rate was 4.62%. The rate for one-year bills was the highest since Sept. 15, when they sold at 4.51%. The new discount rates understate the actual return to investors: 4.58% for three-month bills, with a $10,000 bill selling for $9,887.00; 4.67% for a six-month bill, selling for $9,772.50; and 4.62% for one-year bills, selling for $9,553.90. The next auction, for two-year notes, will be Nov. 24. 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, rose to 4.46% last week from 4.10% the previous week.