Rates on Short-Term T-Bills Rise in Auction

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 4.45%, up from 4.44% last week. An additional $18 billion in six-month bills was auctioned at a discount rate of 4.55%, up from 4.54% last week.

The rates understate the actual return to investors -- 4.56% for three-month bills, with a $10,000 bill selling for $9,887.51, and 4.72% for a six-month bill selling for $9,770.23.

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 4.7% last week from 4.67% the previous week.