3-Month Treasury Bill Rate Moves Higher

The Treasury Department sold $7.5 billion in three-month bills at a discount rate of 4.75%, up from 4.61% last week. An additional $7.5 billion was sold in six-month bills at a rate of 4.96%, up from 4.85%. The new discount rates understate the actual return to investors: 4.889% for three-month bills, with a $10,000 bill selling for $9,879.90, and 5.173% for a six-month bill selling for $9,749.20. An auction of two-year notes is scheduled tentatively for July 28. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 5.14% last week from 5.03% the previous week.