Rates on 3-, 6-Month T-Bills Climb in Auction

The Treasury Department auctioned $16 billion in three-month bills at a discount rate of 4.940%, up from 4.850% last week. An additional $15 billion in six-month bills was auctioned at a discount rate of 4.935%, up from 4.890% last week.

The new discount rates understate the actual return to investors -- 5.072% for three-month bills, with a $10,000 bill selling for $9,875.13, and 5.132% for a six-month bill selling for $9,750.51.

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 5.03% last week from 4.90% the previous week.