Interest Rates Mixed in T-Bill Auction

The Treasury Department sold $17 billion in three-month bills at a discount rate of 1.73%, down from 1.75% last week. An additional $15 billion was sold in six-month bills at a rate of 1.90%, up from 1.87%.

The three-month rate was the lowest since April 22 when the bills sold for 1.69%. The six-month rate was the highest since April 15 when the rate was 1.905%.

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 1.946% for a six-month bill selling for $9,903.90.

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 2.40% last week from 2.31% the previous week.