Interest Rates Rise at Treasury Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.73%, up from 1.715% last week. An additional $14 billion in six-month bills was sold at 1.83%, up from 1.81%.

The three-month rate was the highest since Feb. 4, when the bills sold for 1.735%. The six-month rate was the highest since Dec. 26, when the rate was 1.85%.

The new discount rates understate the actual return to investors--1.76% for three-month bills, with a $10,000 bill selling for $9,956.30, and 1.872% for a six-month bill selling for $9,907.50.

In a separate report, the Federal Reserve said the average yield on one-year constant-maturity bills, the most popular index for making changes in adjustable-rate mortgages, rose to 2.24% last week from 2.19% the previous week.