Short-Term Rates Rise in T-Bill Auction

The Treasury Department sold $19 billion in three-month bills at a discount rate of 0.92%, up from 0.89% last week. An additional $17 billion was sold in six-month bills at 1%, up from 0.955%.

The three-month rate was the highest since Dec. 1, 2003, when the bills sold for 0.925%. The six-month rate was the highest since Jan. 5, when it was 1.02%.

The new rates understate the actual return to investors -- 0.939% for three-month bills, with a $10,000 bill selling for $9,976.70, and 1.023% for a six-month bill selling for $9,949.40.

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 1.25% last week from 1.2% the previous week.