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Interest rates rise on short-term T-bills

WASHINGTON -- Interest rates on short-term Treasury bills rose in auction yesterday.

The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 4.975 percent, up from 4.940 percent last week. Another $14 billion in six-month bills was auctioned at a discount rate of 4.950 percent, up from 4.920 percent last week.

The three-month rate was the highest since 4.990 percent on Oct. 23. The six-month rate was the highest since 4.955 percent on Nov. 13.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,874.24 while a six-month bill sold for $9,749.75.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, rose to 5.03 percent last week, up from 4.98 percent the previous week.