Interest rates on short-term Treasury bills rise

April 20, 2004|Associated Press

WASHINGTON -- Interest rates on short-term Treasury securities rose in yesterday's auction.

The Treasury Department sold $16 billion in three-month bills at a discount rate of 0.935 percent, up from 0.915 percent last week. An additional $13 billion was sold in six-month bills at a rate of 1.080 percent, up from 1.025 percent.

The three-month rate was the highest since March 29, when the bills sold for 0.945 percent. The six-month rate was the highest since June 2, 2003, when the rate was 1.095 percent.

The new discount rates understate the actual return to investors -- 0.949 percent for three-month bills with a $10,000 bill selling for $9,976.40 and 1.101 percent for a six-month bill selling for $9,945.40.

In a separate report, the Federal Reserve said yesterday that the average yield for one-year constant maturity Treasury bills, a popular index for making changes in adjustable rate mortgages, rose to 1.41 percent last week from 1.32 percent the previous week.