Short-term interest rates rise in Treasury auction

The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 4.94%, up from 4.93% last week. An additional $14 billion in six-month bills was auctioned at 4.92%, up from 4.9% last week.

The rates understate the actual return to investors -- 5.072% for three-month bills, with a $10,000 bill selling for $9,875.13, and 5.116% for a six-month bill selling for $9,751.27.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, edged down to 4.98% last week from 4.99% the previous week.