TREE NEWS reports: The secured overnight financing rate (SOFR) stood at 3.87% on October 1, down from 3.90% the previous day. The effective federal funds rate was 3.88% on the same day, unchanged from the prior session.
SOFR Falls to 3.87% as Fed Funds Rate Holds at 3.88%
AI take
SOFR printing just below the effective federal funds rate is a quiet but telling shift in the plumbing that underpins dollar funding. The spread matters because repo and unsecured overnight markets normally trade in a tight band, and any persistent inversion can signal collateral scarcity or balance-sheet constraints at dealers rather than a change in the policy stance itself. Whether SOFR stays below the funds rate in coming sessions, or snaps back to its usual relationship, is the open question worth tracking.
Generated by AI for reference only.
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