Interest Rates Rise in Treasury Auction

The Treasury Department sold $13 billion in three-month bills at a discount rate of 5.22%, up from 5.05% last week. An additional $11 billion was sold in six-month bills at a rate of 5.06%, up from 4.825%. Both the three-month and six-month rates were the highest since Jan. 2, when the bills sold for 5.7% and 5.36%, respectively. The new discount rates understate the actual return to investors--5.361% for three-month bills, with a $10,000 bill selling for $9,868.10, and 5.261% for a six-month bill selling for $9,744.40. 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 4.79% last week from 4.89% the previous week.