Short-Term Rates Up in Treasury Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 0.945%, up from 0.895% last week. An additional $17 billion in six-month bills was sold at 0.98%, up from 0.95%.

The three-month rate was the highest since June 9, when the bills sold for 1.005%. The six-month rate was the highest since June 2, when it was 1.095%.

The new discount rates understate the actual return to investors -- 0.964% for three-month bills, with a $10,000 bill selling for $9,976.10, and 1% for a six-month bill selling for $9,950.50.

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 1.13% last week from 1.10% the previous week.