Yields on Short-Term T-Bills Edge Higher

The Treasury Department sold $7.51 billion in three-month bills at a discount rate of 4.42%, up from 4.40% last week. An additional $7.51 billion was sold in six-month bills, also at a rate of 4.42%, up from 4.39%. The new discount rates understate the actual return to investors--4.53% for three-month bills, with a $10,000 bill selling for $9,888.30, and 4.59% for a six-month bill selling for $9,776.50. An auction of two-year notes is tentatively scheduled for Feb 24. 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, rose to 4.61% last week from 4.51% the previous week.