Short-Term Rates Mixed in T-Bill Auction

The Treasury Department sold $18 billion in three-month bills at a discount rate of 1.64%, up from 1.635% last week. It sold $16 billion in six-month bills at 1.84%, down from 1.86%.

The three-month rate was the highest since Oct. 21, 2002, when the bills sold for 1.665%. The six-month rate was the lowest since Aug. 30, when it was 1.775%.

The new rates understate the actual return to investors: 1.671% for three-month bills, with a $10,000 bill selling for $9,958.50, and 1.883% for a six-month bill selling for $9,907.00.

In a separate report, the Federal Reserve said the average yield for one-year constant-maturity Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 2.1% last week from 2.03% the previous week.