Rates Rise on Short-Term Treasury Bills

Interest rates on short-term Treasury securities rose in Monday’s auction. The Treasury Department sold $8.5 billion in three-month bills at a discount rate of 5.730%, up from 5.690% last week. An additional $7.5 billion was sold in six-month bills at a rate of 5.860%, up from 5.825%. The three-month rate was the highest since May 1, 1995, when the bills sold for 5.74%. The six-month rate was the highest since April 3, 1995, when the rate was 5.90%. The new discount rates understate the actual return to investors--5.893% for three-month bills, with a $10,000 bill selling for $9,855.20 and 6.124% for a six-month bill selling for $9,703.70. The next auction of two-year notes is set for March 29. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills was 6.18% last week, unchanged from the previous week.