TREE NEWS reports: The Secured Overnight Financing Rate rose to 3.95% as of Oct. 27 from 3.93%, putting it 5 basis points above the 3.90% Interest on Reserve Balances rate — the widest spread since the April 15 tax date, New York Fed data showed Wednesday. Tri-party and broad general collateral repo rates both climbed to 3.94% from 3.91%, also 4 basis points over IORB. Treasury auction settlements are set to drain about $40 billion of liquidity on Oct. 29 and about $26 billion on Oct. 30.
SOFR Rises to 3.95%, Widest Spread Over IORB Since April 15
AI take
The move matters less for the headline rate than for the widening of SOFR over IORB, a funding-market premium that had been dormant since the April tax date. The coincidence with heavy auction settlement drain points to balance-sheet capacity, not policy, as the driver — a pressure that tends to fall hardest on dealers and cash lenders at the front end. Whether the spread compresses once settlements clear, or persists into month-end, is the open question worth watching.
Generated by AI for reference only.
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