Rates on Short-Term T-Bills Rise at Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.68%, up from 1.66% last week. An additional $16 billion in six-month bills was sold at a rate of 1.69%, up from 1.675%.

The new discount rates understate the actual return to investors--1.712% for three-month bills, with a $10,000 bill selling for $9,957.50, and 1.727% for a six-month bill selling for $9,914.60.

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, fell to 1.88% last week from 1.97% the week before.