Money MarketsFederal Reserve Bank of New YorkDaily

Secured Overnight Financing Rate (SOFR)

What is Secured Overnight Financing Rate (SOFR)?

SOFR is the broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repo market. It replaced LIBOR as the primary U.S. dollar reference rate in 2023.

Why it matters

SOFR is the benchmark underpinning more than USD 200 trillion of derivatives and floating-rate loans. Spikes in SOFR vs. the fed funds target signal repo-market stress and reserve scarcity, which precede broader funding dislocations.

How to read prints

When it rises

Repo funding tightening; possible reserve scarcity or year-end pressure.

When it falls

Repo funding ample; system liquidity adequate.

Frequently asked

What is SOFR?⌄
The volume-weighted median rate on overnight Treasury repo transactions, published daily by the New York Fed at 8 AM ET.
Why did SOFR replace LIBOR?⌄
LIBOR was an unsecured bank-survey rate vulnerable to manipulation and represented a shrinking interbank market. SOFR is transaction-based, secured, and reflects ~USD 1 trillion of daily transactions.
How is SOFR used in trading?⌄
As the reference rate for CME SOFR futures (replacing Eurodollar futures), floating-rate loans, swaps, and a growing share of corporate debt.
What does it mean when SOFR spikes above the EFFR?⌄
It signals stress in the repo market; reserves are scarce or dealers cannot intermediate efficiently. Sustained spikes historically precede Fed liquidity facility action.

Track it on Market Ontology

Monitor Secured Overnight Financing Rate (SOFR) in real time on Liquidity Regime, alongside regime classification, transmission mapping, and cross-asset context.

SourceFederal Reserve Bank of New York
FrequencyDaily
CategoryMoney Markets
FRED SeriesSOFR
Unit%
Related ModuleLiquidity Regime

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