Short-Term T-Bill Rates Rise at Auction

The Treasury Department sold $15 billion in three-month bills at a discount rate of 3.58%, up from 3.38% last week. An additional $12 billion was sold in six-month bills at a rate of 3.50%, up from 3.34%.

The three-month rate was the highest since June 4, when the bills sold at 3.59%. The six-month rate was the highest since June 11, when the rate was 3.51%.

The new discount rates understate the actual return to investors--3.66% for three-month bills, with a $10,000 bill selling for $9,909.50, and 3.61% for a six-month bill selling for $9,823.10.

In a separate report, the Federal Reserve said the average yield for one-year constant-maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 3.6% last week from 3.46% the previous week.