Rates for Short-Term Treasury Bills Rise

The Treasury Department sold $13.5 billion in three-month bills at an average discount rate of 5.08%, up from 4.92% last week. An additional $13.6 billion was sold in six-month bills at an average rate of 5.11%, up from 5.08%. The three-month bill rate was the highest since they sold for 5.18% on Sept. 23. The six-month bill rate was the highest since they averaged 5.15% on Oct. 28. The new discount rates understate the actual return to investors: 5.22% for three-month bills, with a $10,000 bill selling for $9,871.60, and 5.32% for a six-month bill selling for $9,741.70. 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 5.50% last week from 5.51% the previous week. The next auction of two-year notes will be Jan. 21, five-year notes Jan. 22.