Treasury Bill Rates Mixed at Auction

The Treasury Department sold $7.29 billion in three-month bills at an average discount rate of 5.140%, up from 5.075% last week. An additional $7.26 billion was sold in six-month bills at an average rate of 5.035%, down from 5.070%. The three-month rate was the highest since Dec. 29, when those bills sold for 5.285%. The six-month rate was the lowest since Jan. 26, when the average was 5.025%. The new discount rates understate the actual return to investors--5.279% for three-month bills with a $10,000 bill selling for $9,870.10, and 5.237% for a six-month bill selling for $9,745.50. The next auction of two-year notes is today; five-year notes will be auctioned Wednesday. In a separate report, the Federal Reserve Board said that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, was 5.28% last week, the same as the previous week.