Short-Term Rates Up in Treasury Auction

The Treasury Department sold $16 billion in three-month bills at a discount rate of 0.885%, up from 0.87% last week. An additional $15 billion was sold in six-month bills at 0.995%, up from 0.97%.

The new rates understate the actual return to investors -- 0.901% for three-month bills, with a $10,000 bill selling for $9,977.90, and 1.016% for a six-month bill selling for $9,950.00.

In a separate report, the Federal Reserve said the average yield for one-year, constant-maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 1.28% last week from 1.27% the previous week.