Interest rates on short-term T-bills rose at...

Interest rates on short-term T-bills rose at the latest auction to their highest level in nine months. The Treasury sold $6.8 billion of new three-month bills at an average discount rate of 6.89%, up from 6.88% last week. Another $6.8 billion of new six-month bills was sold at an average discount rate of 7.15%, up from 7.09% last week. The rates were the highest since three-month bills sold for 6.96% on Oct. 13 and six-month bills averaged 7.21% on Oct. 19. The new discount rates understate the actual return to investors--7.11% for three-month bills, with a $10,000 bill selling for $9,825.80, and 7.52% for a six-month bill selling for $9,638.50. The discount rate reflects the price discount received when government securities are purchased at less than face value.