Average Rates for Short-Term T-Bills Rise

The Treasury Department sold $8 billion in three-month bills at an average discount rate of 4.07%, up from 3.85% last week; $8 billion in six-month bills was sold at an average rate of 4.16%, up from 3.87%. These rates are the highest since Oct. 5, when three-month bills sold for 4.16% and the six-month average was 4.19%. The new discount rates understate the actual return to investors: 4.17% for three-month bills, with a $10,000 bill selling for $9,897.10, and 4.30% for a six-month bill selling for $9,789.90. 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 4.01% last week from 4.14% the previous week.