COFI Hits Another New Low

The Eleventh Federal Home Loan Bank District Cost of Funds Index set another new low in January as it declined by 7 basis points from the previous low in December.According to the Federal Home Loan Bank of San Francisco, COFI stood at 2.308% in January, compared with 2.375% in December and 2.823% in January 2002. However, even though the decline in COFI has slowed, it is likely that the index will fall even further three to six months down the line. According to data collected by the Federal Reserve Bank of St. Louis, in July 2002 the rates on certificates of deposit were 1.84% for the six-month, 1.79% for the three-month, and 1.78% for the one-month. Six months later, the rates had fallen by about 50 bps, to 1.30%, 1.29%, and 1.29%, respectively.