Rates on Treasury Bills Rise at Auction

The Treasury Department sold $10.5 billion in three-month bills at a discount rate of 6.075%, up from 6.005% last week. An additional $9.5 billion was sold in six-month bills at a rate of 6.040%, up from 5.985%. The three-month rate was the highest since Aug. 28 when the bills sold for 6.140%. The six-month rate also was the highest since that date when the rate was 6.100%. The new discount rates understate the actual return to investors--6.257% for three-month bills with a $10,000 bill selling for $9,846.40 and 6.318% for a six-month bill selling for $9,694.60. The next auction of two-year notes is scheduled for Oct. 25. In a separate report, the Federal Reserve said that the average yield for one-year Treasury bills fell to 6.08% last week from 6.09% the previous week.