T-Bill Rates Rise to Highest in 4 Years

Interest rates on short-term Treasury bills rose in auction to the highest levels in nearly four years. The Treasury Department auctioned $16 billion in three-month bills at a discount rate of 3.08%, up from 2.965% last week. An additional $14 billion in six-month bills was auctioned at a discount rate of 3.22%, up from 3.175% last week.

The new discount rates understate the actual return to investors -- 3.147% for three-month bills, with a $10,000 bill selling for $9,922.14 and 3.319% for a six-month bill selling for $9,837.21.

Also, the Federal Reserve said the average yield for one-year T-bills rose to 3.4% last week from 3.39% the previous week.