Rates Rise on Short-Term Treasury Bills

The Treasury Department sold $7.52 billion in three-month bills at an average discount rate of 5.17%, up from 5.08% last week. An additional $7.52 billion was sold in six-month bills at an average rate of 5.35%, up from 5.30%. The three-month bill rate was the highest since they sold for 5.22% on April 28. The six-month bill rate was the highest since they averaged 5.37% on May 5. The new discount rates understate the actual return to investors: 5.31% for three-month bills, with a $10,000 bill selling for $9,869.30, and 5.58% for six-month bills, with a $10,000 bill selling for $9,729.50. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.86% last week from 5.90% the previous week. The next auction of one-year bills will be Thursday; two-year notes on May 28; and five-year notes on May 29.