Rates on Short-Term T-Bills Rise in Auction

The Treasury Department auctioned $19 billion in three-month bills at a discount rate of 3.890%, up from 3.850% last week. An additional $17 billion in six-month bills was auctioned at a discount rate of 4.125%, up from 4.065% last week.

The new discount rates understate the actual return to investors -- 3.983% for three-month bills, with a $10,000 bill selling for $9,901.67, and 4.271% for a six-month bill selling for $9,791.46.

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 4.26% last week from 4.19% the previous week.