Rates Mixed on Short-Term Treasuries

The Treasury Department sold $11.6 billion in three-month bills at an average discount rate of 5.04%, up from 5.02% last week. Another $11.6 billion was sold in six-month bills at an average rate of 5.11%, which was unchanged. The three-month bill rate was the highest since they sold for 5.08% on Dec. 30. The six-month bill rate was the highest since they averaged 5.15% on Oct. 28. The new discount rates understate the actual return to investors: 5.18% for three-month bills, with a $10,000 bill selling for $9,872.60, and 5.32% for a six-month bill selling for $9,741.70. In a separate report, the Federal Reserve Board said the average yield for one-year T-bills rose to 5.61% last week from 5.55% the previous week. The next auction of two-year notes will be Jan. 21; the next for five-week notes is Jan. 22. Ten-year inflation-indexed notes will be auctioned Jan. 29.