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

The Treasury Department sold $8.6 billion in three-month bills at an average discount rate of 7.78 percent, up from 7.74 percent last week. Another $8.6 billion in six-month bills were sold at an average discount rate of 7.67 percent, up from 7.64 percent last week.

The new discount rates understate the actual return to investors -- 8.05 percent for three-month bills with a $10,000 bill selling for $9,803.30 and 8.09 percent for a six-month bill selling for $9,612.20.

In a separate report, the Federal Reserve said Monday that the average yield for 1-year Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 8.14 percent last week, up from 8.05 percent the previous week.

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