WASHINGTON - Interest rates on short-term Treasury bills rose in Monday's auction with three-month bills hitting the highest level since late September.

The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.135 percent, up from 0.125 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.180 percent, up from 0.160 percent last week.

The three-month rate was the highest since these bills averaged 0.155 percent on Sept. 27. The six-month rate was the highest since these bills averaged 0.185 percent on Oct. 4.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,996.59 while a six-month bill sold for $9,990.90. That would equal an annualized rate of 0.137 percent for the three-month bills and 0.183 percent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, rose to 0.24 percent last week from 0.22 percent the previous week.

ASSOCIATED PRESS