The Eleventh Federal Home Loan District Cost of Funds Index is poised to break the 3% barrier, a level it has not exceeded since December 2001.According to the Federal Home Loan Bank of San Francisco, the index for September stood at 2.972%, up 10 basis points from August's 2.870. Given that the Federal Reserve Board is likely to continue its pattern of 25-basis-point hikes in the federal funds rate, it is likely that COFI will continue to rise and surge over the 3% level. COFI is a weighted average of the cost of the money that thrifts in California, Arizona, and Nevada use to originate mortgage loans. COFI stood at 3.074% for December 2001, during a period of rapid declines in the index.
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