Interest Rates on Treasury Bills Rise

The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 2.9%, up from 2.8% last week. An additional $15 billion in six-month bills was auctioned at a discount rate of 3.1%, up from 3% last week.

The new discount rates understate the actual return to investors -- 2.95% for three-month bills with a $10,000 bill selling for $9,926.82 and 3.20% for a six-month bill selling for $9,841.91.

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, fell to 3.32% last week from 3.35% the previous week.