Interest Rates Mixed in Treasury Auction

The Treasury Department sold $10.4 billion in three-month bills at an average discount rate of 4.94%, up from 4.88% last week. An additional $11.5 billion was sold in six-month bills at an average rate of 5.05%, down from 5.10%. The three-month bill rate was the highest since they sold for 5.03% on May 27. The six-month bill rate was the lowest since they averaged 5.03% on Feb. 24. The new discount rates understate the actual return to investors--5.07% for three-month bills, with a $10,000 bill selling for $9,875.10, and 5.25% for a six-month bill selling for $9,743.30. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills fell to 5.65% last week from 5.72% the previous week. Two-year notes will be auctioned today, and five-year notes on Wednesday.