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Interest rates on short-term Treasury securities rose in Monday's auction to the highest level in two weeks.

The Treasury Department sold $6.6 billion in three-month bills at an average discount rate of 8.32 percent, up from 8.21 percent last week. Another $6.6 billion was sold in six-month bills at an average discount rate of 8.33 percent, up from 8.19 percent.

The rates were the highest since May 8, when three-month bills sold for 8.41 percent and six-month bills averaged 8.39 percent.

The new discount rates understate the actual return to investors -- 8.62 percent for three-month bills with a $10,000 bill selling for $9,789.70, and 8.82 percent for a six-month bill selling for $9,576.60.

In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 8.89 percent last week, down from 9.05 percent the previous week.

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