Treasury Bill Rates Increase in Auction

The Treasury Department auctioned $10 billion in three-month bills at a discount rate of 4.905%. Another $10 billion in six-month bills was auctioned at a discount rate of 4.770%. The three-month rate was up from 4.900% last week and was the highest since three-month bills averaged 4.920% on Feb. 5. The six-month rate was up from 4.745% last week and was the highest since 4.840% on Jan. 29. The new discount rates understate the actual return to investors--5.036% for three-month bills, with a $10,000 bill selling for $9,876, and 4.955% for a six-month bill selling for $9,758.90. 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 4.80% last week from 4.72% the previous week.