T-Bill Rates Rise to Highest Level in a Month

The Treasury Department sold $7.27 billion in three-month bills at an average discount rate of 5.10%, up from 5.07% last week. An additional $7.25 billion was sold in six-month bills at an average rate of 5.09%, up from 5.03%. The sale represented a slight inversion of the yield curve. The rates were the highest since Jan. 5, when three-month bills sold for 5.12% and six-month bills averaged 5.13%. The new discount rates understate the actual return to investors: 5.24% for three-month bills, with a $10,000 bill selling for $9,871.10, and 5.30% for a six-month bill selling for $9,742.70. In late trading, interest rates fell, and the yield curve returned to normal. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.28% last week, from 5.22% the previous week. The next auction of three-year notes will be Feb. 10; 10-year notes Feb. 11; two-year notes Feb. 24; and five-year notes Feb. 25. The next auction of 30-year bonds will be Feb. 12.