Weekly Treasury rates rise to highest level since 2002

WASHINGTON ‹ Interest rates on short-term Treasury bills rose in Monday's auction to the highest level since 2002.

The Treasury Department auctioned $18 billion in three-month bills at a discount rate of 1.425 percent. Another $16 billion in six-month bills was auctioned at a discount rate of 1.735 percent.

The three-month rate was up from 1.330 percent last week and was the highest since three-month bills averaged 1.550 percent on Oct. 28, 2002. The six-month rate was up from 1.650 percent last week and was the highest since 1.765 percent on June 24, 2002.

The new discount rates understate the actual return to investors ‹ 1.449 percent for three-month bills with a $10,000 bill selling for $9,964.00 and 1.774 percent for a six-month bill selling for $9,912.30.

In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, rose to 2.12 percent last week from 2.07 percent the previous week.