Rates Mixed on 3-, 6-Month Treasuries

The Treasury Department sold $7.5 billion in three-month bills at a discount rate of 5.385%, up from 5.350% last week. An additional $6.5 billion was sold in six-month bills at a rate of 5.520%, down from 5.535%. The three-month rate is the highest since Dec. 20, when the bills sold for 5.400%. The six-month rate is the lowest since Jan. 10, when the rate was 5.420%. The new discount rates understate the actual return to investors--5.549% for three-month bills, with a $10,000 bill selling for $9,863.90, and 5.774% for a six-month bill selling for $9,720.90. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 6.13% last week from 6.12% the previous week. The next auction of two-year notes will be Wednesday; of five-year notes, Feb. 8; of 10-year notes, Feb. 9 and of 30-year bonds, Feb. 10.