Short-Term Treasury Rates Rise

The Treasury Department sold $7.3 billion in three-month bills at an average discount rate of 5.15%, up from 5.11% last week. An additional $7.25 billion in six-month bills was sold at an average rate of 5.27%, up from 5.195%. The rate of three-month bills was the highest since Nov. 17, when they sold for 5.165%. The rate for six-month bills was the highest since May 19, when they averaged 5.35%. The new discount rates understate the actual return to investors--5.291% for three-month bills with a $10,000 bill selling for $9,869.80, and 5.489% for a six-month bill selling for $9,733.60. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.54% last week from 5.5% the previous week. The next auction of two-year notes will be Dec. 22; five-year notes will be on Dec. 23.