Interest Rates Mixed in T-Bill Auction

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 2.710%, down from 2.715% last week. An additional $18 billion in six-month bills was auctioned at a discount rate of 2.935%, up from 2.925% last week.

The new discount rates understate the actual return to investors -- 2.767% for three-month bills with a $10,000 bill selling for $9,931.50 and 3.021% for a six-month bill selling for $9,851.62.

In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 3.20% from 3.13% the previous week.