Rates on Short-Term T-Bills Rise

The Treasury Department sold $11.7 billion in three-month bills at an average discount rate of 5.11%, up from 5.05% last week. Another $11.7 billion was sold in six-month bills at an average rate of 5.17%, up from 5.09%. The three-month bill rate is the highest since they sold for 5.12% on June 30. The six-month bill rate is the highest since they averaged 5.20% on June 9. The new discount rates understate the actual return to investors: 5.25% for three-month bills, with a $10,000 bill selling for $9,870.80, and 5.38% for a six-month bill selling for $9,738.60. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.56% last week, from 5.54% the previous week. The next auction of two-year notes is today, and five-year notes on Wednesday.