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Rates rise on short-term T-bills

WASHINGTON -- Interest rates on short-term Treasury bills rose in yesterday's auction to the highest levels in a month.

The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 0.920 percent. Another $16 billion in six-month bills was auctioned at a discount rate of 1.020 percent.

The three-month rate was up from 0.885 percent last week and was the highest since three-month bills averaged 0.925 percent on Dec. 1. The six-month rate was up from 0.995 percent last week and was the highest since 1.030 percent on Dec. 1.

The new discount rates understate the actual return to investors -- 0.939 percent for three-month bills with a $10,000 bill selling for $9,976.70 and 1.043 percent for a six-month bill selling for $9,948.40.

In a separate report, the Federal Reserve said yesterday that the average constant maturity yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 1.29 percent last week from 1.28 percent the previous week.

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