Rates Up on 3-Month T-Bills; 6-Month Bills Dip

The Treasury Department sold $8.5 billion in three-month bills at a discount rate of 5.800%, up from 5.730% last week. An additional $7.5 billion was sold in six-month bills at a rate of 6.040%, down from 6.150%. The new discount rates understate the actual return to investors--5.968% for three-month bills, with a $10,000 bill selling for $9,853.40, and 6.318% for a six-month bill selling for $9,694.60. In a separate report, 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 6.30% last week from 6.28% the previous week. An auction of two-year notes is tentatively scheduled for June 28.