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Short-term T-bill rates mixed

WASHINGTON -- Interest rates on short-term Treasury bills were mixed in yesterday's auction, with the rate on three-month bills declining while the rate on six-month bills rose.

The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 2.710 percent, down from 2.735 percent last week.

Another $15 billion in six-month bills was auctioned at a discount rate of 3.065 percent, up from 3.035 percent last week.

The three-month rate was the lowest since three-month bills averaged 2.615 percent on Feb. 22. The six-month rate was the highest since 3.090 percent on March 28.

The new discount rates understate the actual return to investors -- 2.767 percent for three-month bills with a $10,000 bill selling for $9,931.50 and 3.156 percent for a six-month bill selling for $9,845.05.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, dropped to 3.33 percent last week from 3.38 percent the previous week.

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