Rates surged on short-term Treasury bills that may be most indanger of not being repaid if Congress can't reach a compromise tolift or suspend the ceiling on government borrowing.

Treasury Secretary Jacob J. Lew last week moved up by two daysto Nov. 3 the date by which lawmakers must raise the nation'sborrowing capacity to ensure the government can meet dailyexpenses. The rate on bills due Nov. 12 reached the highest sinceMarch.

“That rate is moving as it's the bill that will be most likelyat risk,” said Stanley Sun, a New York-based strategist at NomuraHoldings Inc., one of 22 primary dealers that trade directly withthe Federal Reserve. “We are heading to the final two-week windowfor the timeline the Treasury gave, and if the situation doesn'timprove then this could escalate to surrounding issues.”