Short-Term Rates Up in T-Bill Auction

The Treasury Department sold $18 billion in three-month bills at a discount rate of 0.945%, up from 0.93% last week. An additional $16 billion in six-month bills was sold at 0.99%, up from 0.975%.

The three-month rate was the highest since Sept. 2, when the bills sold for 0.97%. The six-month rate was the highest since Feb. 23, when it was 0.995%.

The new discount rates understate the actual return to investors -- 0.961% for three-month bills, with a $10,000 bill selling for $9,976.10, and 1.008% for a six-month bill for $9,950.

In a separate report, the Federal Reserve said the average yield for one-year constant-maturity Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 1.16% last week from 1.23% the previous week.