CALIFORNIA : BRIEFLY / THE ECONOMY : Treasury Bill Rates Rise at Auction

The Treasury Department sold $7.5 billion in three-month bills at a discount rate of 4.875%, up from 4.85% last week. An additional $7.5 billion in six-month bills was sold at a rate of 4.99%, up from 4.95%. The new discount rates understate the actual return to investors--5.017% for three-month bills, with a $10,000 bill selling for $9,876.80, and 5.205% for a six-month bill selling for $9,747.70. An auction of two-year notes is scheduled for Sept. 29. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, fell to 5.19% last week from 5.2% the previous week.