Rate on 3-Month T-Bills Highest Since 1991

Interest rates on short-term Treasury bills rose at auction, with the rate on three-month bills hitting the highest level in nearly a decade. The Treasury Department auctioned $11 billion in three-month bills at a discount rate of 6.16%; $10 billion in six-month bills were auctioned at a discount rate of 6.050%. The three-month rate was up from 6.080% last week and was the highest since three-month bills averaged 6.22% on Jan. 28, 1991. The six-month rate was up from 5.990% last week and was the highest since 6.055% on Oct. 10. The new discount rates understate the actual return to investors--6.344% for three-month bills, with a $10,000 bill selling for $9,844.30, and 6.328% for a six-month bill selling for $9,694.10. The next auction of two-year notes will be Wednesday.