Rates Mixed at Treasury Bill Auction

The Treasury Department sold $9 billion in three-month bills at a discount rate of 5.55%, down from 5.56% last week. It sold $8 billion in six-month bills at a rate of 5.77%, up from 5.71%. The three-month rate was the lowest since Jan. 24 when the bills sold for 5.39%. The new discount rates understate the actual return to investors--5.72% for three-month bills, with a $10,000 bill selling for $9,859.80, and 6.04% for a six-month bill selling for $9,708.30. There will be auctions of five-year Treasury notes today, of 10-year notes on Wednesday and of 30-year bonds on Thursday. The next auction of two-year notes is tentatively scheduled for Feb. 23. In a separate report, the Federal Reserve said the average yield for one-year T-bills, the most popular index for making changes in adjustable-rate mortgages, rose to 6.24% last week from 6.17% the week before.