3-Month T-Bill Rate Climbs to 4.99%

The Treasury Department sold $6.25 billion in three-month bills at an average discount rate of 4.99%, up from 4.97% last week. An additional $7.27 billion was sold in six-month bills at an average rate of 5.03%, up from 5.01%. The rates were the highest since March 2, 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: 5.12% for three-month bills, with a $10,000 bill selling for $9,874, and 5.23% for a six-month bill selling for $9,746. Upcoming auctions are tentatively scheduled for March 24 for two-year notes and March 25 for five-year notes. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, fell to 5.37% last week, from 5.43% the previous week.