Short-Term Interest Rates Rise at Auction

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 4.29%, up from 4.27% last week. An additional $17 billion in six-month bills was auctioned at 4.34%, up from 4.315% last week.

The new rates understate the actual return to investors -- 4.397% for three-month bills, with a $10,000 bill selling for $9,891.56, and 4.499% for a six-month bill selling for $9,780.59.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 4.43% last week from 4.41% the previous week.