T-Bill Interest Rates Mixed in Auction

Interest rates on short-term Treasury securities were mixed in the latest auction.

The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.735%, up from 1.715% last week. An additional $14 billion was sold in six-month bills at a rate of 1.830%, unchanged from last week.

The three-month rate was the highest since Nov. 26 when the bills sold for 1.92%.

The new discount rates understate the actual return to investors--1.769% for three-month bills with a $10,000 bill selling for $9,956.10 and 1.872% for a six-month bill selling for $9,907.50.

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 2.25% last week from 2.18% the previous week.