Discount Rates Rise on Short-Term T-Bills

The Treasury Department sold $8.5 billion in three-month bills at a discount rate of 5.96%, up from 5.9% last week. An additional $7.5 billion was sold in six-month bills at a rate of 6.015%, up from 5.945%. The rates understate the actual return to investors--6.137% for three-month bills, with a $10,000 bill selling for $9,849.30, and 6.29% for a six-month bill selling for $9,695.90. An 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, rose to 6.09% last week from 6.08% the previous week.