Short-Term Rates Return to December Highs

Interest rates on short-term Treasury securities rose to the highest level in two weeks. The Treasury Department said it sold $8.02 billion in three-month bills at a discount rate of 5.36%, up from 5.3% last week. An additional $7.01 billion was sold in six-month bills at a rate of 5.585%, up from 5.505%. The three-month rate was the highest since Dec. 20, when the bills sold for 5.4%. The six-month rate was also the highest since Dec. 20, when the rate was 5.6%. The new discount rates understate the actual return to investors--5.525% for three-month bills, with a $10,000 bill selling for $9,864.50, and 5.844% for a six-month bill selling for $9,717.60. An auction of two-year notes is scheduled tentatively for Jan. 26.