T-Bill Rates Highest in More Than 3 Years

The Treasury Department auctioned $19 billion in three-month bills at a discount rate of 2.36%. It auctioned $16 billion in six-month bills at a discount rate of 2.64%.

The three-month rate was up from 2.33% last week and was the highest since three-month bills averaged 2.38% on Sept. 24, 2001. The six-month rate was up from 2.6% and was the highest since 3.12% on Sept. 9, 2001.

The new discount rates understate the actual return to investors -- 2.41% for three-month bills with a $10,000 bill selling for $9,940.34, and 2.71% for a six-month bill selling for $9,866.79.

In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 2.85% last week from 2.82% the previous week.