Short-Term T-Bills at Highest Rate Since 1991

The Treasury Department auctioned $11 billion in three-month bills at a discount rate of 6.18%, up from 6.16% last week and the highest since three-month bills averaged 6.22% on Jan. 28, 1991. Another $10 billion in six-month bills was auctioned at a discount rate of 6.075%, up from 6.05% last week and the highest since 6.1% on Aug. 28. The new discount rates understate the actual return to investors--6.365% for three-month bills, with a $10,000 bill selling for $9,843.80, and 6.354% for a six-month bill selling for $9,692.90. Separately, the Federal Reserve said that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 6.01% from 5.94% the previous week.