Short-Term Rates Rise at Treasury Auction

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 4.27%, up from 4.15% last week. An additional $17 billion in six-month bills was auctioned at 4.315%, up from 4.25% last week.

The new discount rates understate the actual return to investors -- 4.377% for three-month bills, with a $10,000 bill selling for $9,892.06, and 4.472% for a six-month bill selling for $9,781.85.

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 4.41% last week from 4.37% the previous week.