Rates Rise on 3-, 6-Month T-Bills

The Treasury Department sold $9 billion in three-month bills at a discount rate of 4.050%, up from 3.820% last week. An additional $8 billion was sold in six-month bills at a rate of 4.060%, up from 3.815%. The new discount rates understate the actual return to investors--4.150% for three-month bills, with a $10,000 bill selling for $9,897.60, and 4.204% for a six-month bill selling for $9,794.70. In a separate report, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 4.07% last week from 4% the previous week.