COFI Rises 5bps

The Eleventh Federal Home Loan Bank Cost of Funds Index rose a scant five basis points to 1.758% in June, according to the Federal Home Loan Bank of San Francisco.It was the third month-to-month increase in COFI in the past 12 months. COFI also increased in December, when it went up nearly 8 bps, and in February, when it rose by 3 bps. For historical reference, according to data on the FHLBank-SF website, the last time COFI rose in successive months was between March and June of 2002. The index of 2.847% for June 2002 was the highest in the past two years and 109 bps higher than in the current month, the second-lowest mark in COFI's history. The last long-term rise in COFI started when the May 1999 index hit what turned out to be a temporary bottom at 4.480%, before peaking in December 2000 at 5.617%. Since that time, except for the occasional upward movement, COFI has been in a downward trend. However, that may soon be reversing.