WASHINGTON - Interest rates on short-term Treasury bills rose in yesterday's auction with rates on three-month bills rising to the highest level in a month.
The Treasury Department auctioned $25 billion in three-month bills at a discount rate of 1.710 percent, up from 1.695 percent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 1.920 percent, up from 1.880 percent last week.
The three-month rate was the highest since these bills averaged 1.865 percent on July 7. The six-month rate was the highest since these bills averaged 1.955 percent on July 14.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,956.78 while a six-month bill sold for $9,902.93. That would equal an annualized rate of 1.741 percent for the three-month bills and 1.966 percent for the six-month bills. The Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 2.30 percent last week from 2.33 percent the previous week.