Rates on Short-Term T-Bills Mixed in Auction

The Treasury Department auctioned $19 billion in three-month bills at a discount rate of 3.87%, down from 3.89% last week. An additional $17 billion in six-month bills was auctioned at a discount rate of 4.155%, up from 4.125% last week.

The new discount rates understate the actual return to investors: 3.963% for three-month bills, with a $10,000 bill selling for $9,902.18, and 4.303% for a six-month bill selling for $9,789.94.

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 4.32% last week from 4.26% the previous week.