Short-Term T-Bill Rates Rise in Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.92%, up from 1.9% last week. An additional $16 billion was sold in six-month bills at a rate of 1.99%, up from 1.96%.

The three-month rate was the highest since Nov. 5, when the bills sold for 1.975%. The six-month rate was the highest since Oct. 29, when the rate was 2.005%.

The new discount rates understate the actual return to investors--1.955% for three-month bills with a $10,000 bill selling for $9,951.50 and 2.038% for a six-month bill selling for $9,899.40.

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 2.35% last week from 2.24% the previous week.