Interest rates on short-term Treasury securities rose in Monday’s auction to the highest level in eight months. The Treasury Department sold $7.5 billion in three-month bills at a discount rate of 4.570 percent, up from 4.480 percent last week. An additional $7.5 billion was sold in six-month bills at a rate of 4.630 percent, up from 4.510 percent. The three-month rate was the highest since Sept. 21, when the bills sold for 4.635 percent. The six-month rate was the highest since Sept. 14, when the rate was 4.755. The new discount rates understate the actual return to investors–4.700 percent for three-month bills, with a $10,000 bill selling for $9,884.50, and 4.821 percent for a six-month bill selling for $9,765.90. In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills rose to 4.79 percent last week from 4.78 percent the previous week.
