T-bill yields rose sharply at the latest auction.

The Treasury sold $6.8 billion in new three-month bills at an average discount rate of 7.07%, up from last week’s 6.81%. Another $6.8 billion was sold in new six-month bills at an average discount rate of 7.24%, up from 7.05% the week before. The rates were the highest since Sept. 16, when three-month bills sold for 7.17% and six-month bills averaged 7.32%. The new discount rates understate the actual return to investors--7.3% for three-month bills and 7.62% for six-month bills. The discount rate reflects the price discount received when government securities are purchased at less than face value.