Interest Rates Mixed in Treasury Auction

Interest rates on short-term T-bills were mixed as the Treasury Department sold $8.5 billion in three-month bills at a discount rate of 5.720%, down from 5.780% last week. An additional $7.5 billion was sold in six-month bills at a rate of 5.905%, up from 5.895%. The three-month rate was the lowest since March 6, when the bills sold for 5.690%. The six-month rate was the highest since March 20, 1995, when the rate was 5.910%. The new discount rates understate the actual return to investors--5.885% for three-month bills, with a $10,000 bill selling for $9,855.40, and 6.171% for a six-month bill selling for $9,701.50. The next auction of two-year notes will be Wednesday. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills rose to 6.24% last week, from 6.20% the previous week.