Rates on Short-Term T-Bills Continue Rise

The Treasury Department sold $13 billion in three-month bills at a discount rate of 1.84%, up from 1.825% last week. An additional $13 billion was sold in six-month bills at a rate of 2.07%, up from 2.02%.

The three-month rate was the highest since Nov. 26, when the bills sold for 1.92%. The six-month rate was the highest since Oct. 22, when the rate was 2.13%.

The new discount rates understate the actual return to investors--1.874% for three-month bills, with a $10,000 bill selling for $9,953.50, and 2.12% for a six-month bill selling for $9,895.40.

In a separate report, the Federal Reserve said that the average yield for one-year constant-maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 2.58% last week from 2.41% the previous week.