COFI Hits Another Record Low

The Eleventh Federal Home Loan Bank District Cost of Funds Index set another new low in January, declining by 7 basis points from the previous low in December.According to the Federal Home Loan Bank of San Francisco, January's COFI was 2.308%, compared with 2.375% for December and 2.823% for January 2002. However, even though the decline in COFI has slowed, the index is likely to fall even further some 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 CD, 1.79% for the three-month, and 1.78% for the one-month. Six months later (in January 2003) those rates had fallen by about 50 bps, to 1.30%, 1.29%, and 1.29%, respectively.