WASHINGTON -- Interest rates on short-term Treasury securities rose in Tuesday's auction.
The Treasury Department sold $18 billion in three-month bills at a discount rate of 1.130 percent, up from 1.050 percent last week. An additional $15 billion was sold in six-month bills at a rate of 1.400 percent, up from 1.375 percent.
The three-month rate was the highest since April 21, 2003, when the bills sold for 1.160 percent. The six-month rate was the highest since Oct. 28, 2002, when the rate was 1.515 percent.
The new discount rates understate the actual return to investors - 1.150 percent for three-month bills with a $10,000 bill selling for $9,971.40 and 1.430 percent for a six-month bill selling for $9,929.20.
In a separate report, the Federal Reserve said Tuesday that the average yield for one-year constant maturity Treasury bills, a popular index for making changes in adjustable rate mortgages, dipped to 1.82 percent last week from 1.83 percent the previous week.