Rates on Short-Term T-Bills Rise in Auction

The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 4.07%, up from 3.905% last week. An additional $15 billion in six-month bills was auctioned at a discount rate of 4.265%, up from 4.2% last week.

The discount rates understate the actual return to investors -- 4.169% for three-month bills, with a $10,000 bill selling for $9,897.12, and 4.42% for a six-month bill selling for $9,784.38.

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, edged down to 4.36% last week from 4.37%.