Rates Increase on Short-Term T-Bills

The Treasury Department sold $11.6 billion in three-month bills at an average discount rate of 5.06%, up from 5.03% last week. Another $11.6 billion was sold in six-month bills at an average rate of 5.12%, up from 5.11%. 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: 5.20% for three-month bills, with a $10,000 bill selling for $9,872.10, and 5.33% for a six-month bill selling for $9,741.20. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills was unchanged from 5.61% last week. The next auction of 10-year inflation-indexed notes will be Jan. 29.