Rates on Short-Term T-Bills Rise in Auction

The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 3.525%, up from 3.44% last week. The Treasury auctioned an additional $15 billion in six-month bills at a discount rate of 3.87%, up from 3.745%.

The new discount rates understate the actual return to investors -- 3.606% for the three-month bills, with a $10,000 bill selling for $9,910.90, and 4.002% for a six-month bill selling for $9,804.35.

In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 3.97% last week from 3.88%.