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Aug 29, 5:07 PM EDT

Rates on US Treasury bills rise at weekly auction

WASHINGTON (AP) -- Interest rates on short-term Treasury bills rose in Monday's auction, with rates on six-month bills climbing to their highest level since March.

The Treasury Department auctioned $40 billion in three-month bills at a discount rate of 0.335 percent, up from 0.310 percent last week. Another $34 billion in six-month bills was auctioned at a discount rate of 0.480 percent, up from 0.450 percent last week.

The three-month rate was the highest since those bills averaged 0.340 percent on May 31. The six-month rate was the highest since those bills averaged 0.510 percent on March 14.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,991.53, while a six-month bill sold for $9,975.73. That would equal an annualized rate of 0.340 percent for the three-month bills and 0.488 percent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged up to 0.59 percent last week from 0.58 percent the previous week.

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