Wednesday, May 15, 2019

SOFR

SOFR stands for secured overnight financing rate.  It is the average rate at which a bank can borrow dollars overnight while posting US Treasury bonds as collateral.

The latest rate is at http://www.sofrrate.com/ and historical rates are at https://apps.newyorkfed.org/markets/autorates/sofr  or
https://apps.newyorkfed.org/markets/AutoRates/Rates-Search-Results-Page

It seems in general to be slightly higher than the 1 month rate for treasury notes, but it can also soar much higher (it was 2.76 on 4/30/19 and 3.15 on 1/2/19) or dip lower (2.37 on 2/27).  Maybe it could be an early warning system for financial distress.  It was 2.38% on May 13, 2019.

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