SOFR Rises to 3.89% on Oct 13; Fed Funds Rate Holds at 3.88%

SOFR edging above the effective fed funds rate is a small but telling spread: the secured repo market is pricing marginally tighter than the unsecured overnight rate, which is the reverse of the usual relationship. Because SOFR anchors most US dollar floating-rate debt and derivatives, even a one-basis-point divergence matters for accruals and hedges tied to the benchmark. Whether the gap persists or reverts to the typical pattern is the open question, and it bears watching around any period of balance-sheet or collateral pressure.