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Short-term T-bill rates mixed

WASHINGTON -- Interest rates on short-term Treasury bills were mixed in auction yesterday with rates on three-month bills rising to the highest level since September 2001.

The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 2.935 percent, up from 2.895 percent last week.

Another $15 billion in six-month bills was auctioned at a discount rate of 3.080 percent, down from 3.110 percent last week.

The three-month rate was the highest since 3.180 percent on Sept. 10, 2001. The six-month rate was the lowest since 3.070 percent on May 16.

The new discount rates understate the actual return to investors -- 2.998 percent for three-month bills with a $10,000 bill selling for $9,925.81 and 3.172 percent for a six-month bill selling for $9,844.29.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, was 3.32 percent last week, the same as the previous week.

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