Rates on Short-Term T-Bills Mixed in Auction

The Treasury Department auctioned $16 billion in three-month bills at a discount rate of 2.805%, up from 2.71% last week. An additional $14 billion in six-month bills was auctioned at a discount rate of 3.04%, down from 3.065% last week.

The new discount rates understate the actual return to investors -- 2.864% for three-month bills, with a $10,000 bill selling for $9,929.10, and 3.13% for a six-month bill selling for $9,846.31.

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, edged down to 3.32% last week from 3.33% the previous week.