Short-Term Rates Up in Treasury Auction

The Treasury Department sold $17 billion in three-month bills at a discount rate of 1.63%, up from 1.59% last week. An additional $15 billion was sold in six-month bills also at a rate of 1.63%, up from 1.53%.

Both the three-month and six-month rates were the highest since Sept. 16, when the bills sold for 1.66% and 1.64%, respectively.

The new discount rates understate the actual return to investors -- 1.66% for three-month bills, with a $10,000 bill selling for $9,958.80, and 1.67% for a six-month bill selling for $9,917.60.

In a separate report, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 1.59% last week from 1.55% the previous week.