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BRIEFLY / THE ECONOMY

Short-Term T-Bill Rate Hits 8-Month High

May 19, 1999|Associated Press

Interest rates on short-term Treasury securities rose at auction to the highest level in eight months. The Treasury Department sold $7.5 billion in three-month bills at a discount rate of 4.57%, up from 4.48% last week. An additional $7.5 billion was sold in six-month bills at a rate of 4.63%, up from 4.51%. The three-month rate was the highest since Sept. 21, when the bills sold for 4.64%. The six-month rate was the highest since Sept. 14, when the rate was 4.8%. The new discount rates understate the actual return to investors: 4.7% for three-month bills, with a $10,000 bill selling for $9,884.50, and 4.8% for a six-month bill selling for $9,765.90. The next auction of two-year notes will be May 26. In a separate report, the Federal Reserve said the average yield for one-year bills rose to 4.79% last week from 4.78% the previous week.

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