Rates on Short-Term T-Bills Rise in Auction

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 4.44%, up from 4.38% last week. An additional $17 billion in six-month bills were auctioned at a discount rate of 4.54%, up from 4.5% last week.

The rates understate the actual return to investors -- 4.55% for three-month bills, with a $10,000 bill selling for $9,887.77, and 4.71% for a six-month bill selling for $9,770.48.

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 4.67% last week from 4.6% the previous week.