Short-Term Rates Rise at Treasury Auction

The Treasury Department auctioned $16 billion in three-month bills at a discount rate of 4.85%, up from 4.765% last week and the highest level in six weeks. An additional $15 billion in six-month bills was auctioned at 4.89%, up from 4.825% last week.

The rates understate the actual return to investors -- 4.978% for a three-month bill, with a $10,000 bill selling for $9,877.40, and 5.084% for a six-month bill selling for $9,752.78.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, was unchanged last week at 4.9%.