Short-Term Treasury Rates Rise

The Treasury Department auctioned $9.5 billion in three-month bills at an average discount rate of 6.09%. Another $8.5 billion in six-month bills was auctioned at an average discount rate of 6.12%. The three-month rate was up from 6.01% last week and was the highest since three-month bills averaged 6.22% on Jan. 28, 1991. The six-month rate was up from 6.01% last week and was the highest since 6.15% on May 30. The new discount rates understate the actual return to investors--6.27% for three-month bills with a $10,000 bill selling for $9,846.10 and 6.4% for a six-month bill selling for $9,690.90. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills--the most popular index for making changes in adjustable rate mortgages--fell to 6.06% last week from 6.11% the previous week.