SOFR Holds at 3.94% on Fed Hold Day; Fed Funds Rate Steady at 3.88%

The gap between SOFR and the effective fed funds rate is the detail worth noticing: secured overnight borrowing continues to price above unsecured bank funding, a spread that persists even as policy sits still. That relationship matters for anyone using SOFR as a benchmark, from repo desks to issuers of floating-rate debt, since it shapes how reference-rate exposure behaves when the Fed is on hold rather than moving. Whether the spread narrows or widens from here, absent a policy change, is the open question.