Rate on Three-Month T-Bills Rises in Auction

The Treasury Department auctioned $15 billion in three-month bills at a discount rate of 4.955%, up from 4.905% last week. An additional $14 billion in six-month bills was auctioned at a discount rate of 5.090%, down from 5.110% last week.

The new discount rates understate the actual return to investors -- 5.088% for three-month bills, with a $10,000-bill selling for $9,874.75, and 5.297% for a six-month bill selling for $9,742.67.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, rose to 5.27% last week from 5.24% the previous week.