Rates on T-Bills Rise in Treasury Auction

The Treasury Department auctioned $18 billion in three-month bills at a discount rate of 3.22%, up from 3.135% last week. An additional $16 billion in six-month bills was auctioned at a discount rate of 3.42%, up from 3.355% last week.

The new discount rates understate the actual return to investors -- 3.292% for three-month bills, with a $10,000 bill selling for $9,918.61, and 3.529% for a six-month bill selling for $9,827.10.

Also, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 3.59% last week from 3.52% the previous week.