Short-Term Treasury Rates Rise at Auction

The Treasury Department sold $17 billion in three-month bills at a discount rate of 1.75%, up from 1.74% last week. An additional $15billion was sold in six-month bills at 1.87%, up from 1.85%.

The three-month rate was the highest since April 1, when the bills sold for 1.79%. The six-month rate was the highest since April 29, when the rate was 1.88%.

The new discount rates understate the actual return to investors--1.781% for three-month bills, with a $10,000 bill selling for $9,955.80, and 1.913% for a six-month bill selling for $9,905.50.

Separately, 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 2.31% last week from 2.33% the previous week.