Six-Month Rate Highest Since September

The Treasury Department sold $7.52 billion in three-month bills at a discount rate of 4.51%, down from 4.62% last week. An additional $7.51 billion was sold in six-month bills at a rate of 4.76%, up from 4.75% the previous week. The three-month rate was the lowest since May 24, when the bills sold for 4.495%. The six-month rate was the highest since Sept. 8, 1998, when the rate was 4.79%. The new discount rates understate the actual return to investors-- 4.64% for three-month bills, with a $10,000 bill selling for $9,886, and 4.96% for a six-month bill selling for $9,759.40. An auction of two-year notes is scheduled tentatively for June 23. 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 5.08% last week, from 4.93% the previous week.