3-Month T-Bill Rate Hits 11-Month High

The Treasury Department sold $8 billion in three-month Treasury bills at a discount rate of 4.79%, up from 4.70% last week. It sold an additional $8 billion in six-month bills at a rate of 4.92%, up from 4.75%. The three-month rate was the highest since Aug. 31, 1998, when the bills sold for 4.8%. The six-month rate was the highest since June 28, when the rate was 4.96%. The new discount rates understate the actual return to investors--4.93% for three-month bills, with a $10,000 bill selling for $9,877.60, and 5.13% for a six-month bill selling for $9,751.50. Also this week, the Treasury plans to auction five-year notes today, 10-year notes Wednesday and the 30-year bond Thursday. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills rose to 5.13% last week from 5.07% the previous week.