Rates rise in Treasury bill auction

WASHINGTON (AP) _ Interest rates on short-term Treasury securities rose in Monday's auction. <br><br>The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.585 percent,

Monday, October 7th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Interest rates on short-term Treasury securities rose in Monday's auction.

The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.585 percent, up from 1.540 percent last week. An additional $14 billion was sold in six-month bills at a rate of 1.530 percent, up from 1.475 percent.

Both the three-month and six-month rates were the highest since Sept. 23, when the bills sold for 1.610 percent and 1.580 percent, respectively.

The new discount rates understate the actual return to investors _ 1.615 percent for three-month bills with a $10,000 bill selling for $9,959.90 and 1.562 percent for a six-month bill selling for $9,922.70.

In a separate report, the Federal Reserve said Monday that the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 1.55 percent last week from 1.68 percent the previous week.