Short-Term T-Bill Rates Rise at Auction

Interest rates on short-term Treasury securities rose at auction. The Treasury Department sold $8.5 billion in three-month bills at a discount rate of 5.83%, up from 5.68% last week. An additional $7.5 billion was sold in six-month bills at a rate of 5.975%, up from 5.955%. The three-month rate was the highest since May 15, when the bills sold for 6.065%. The six-month rate was the highest since June 12, when the rate was 6.005%. The new discount rates understate the actual return to investors--6.001% for three-month bills, with a $10,000 bill selling for $9,852.60 and 6.247% for a six-month bill selling for $9,697.90. The next auction of two-year notes is scheduled for July 26. 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, fell to 6.13% last week from 6.15% the previous week.