T-Bill Rates Climb to Highest Levels Since ’01

The Treasury Department auctioned $19 billion in three-month bills at a discount rate of 3.345%, up from 3.22% last week. An additional $17 billion in six-month bills was auctioned at a discount rate of 3.54%, up from 3.42%.

The three-month rate was the highest since Sept. 4, 2001, when the rate was 3.36%. The six-month rate was the highest since May 29, 2001, when it was 3.55%.

The new discount rates understate the actual return to investors: 3.420% for three-month bills, with a $10,000 bill selling for $9,915.45, and 3.655% for a six-month bill selling for $9,821.03.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 3.68% last week from 3.59%.