TREE NEWS reports: The secured overnight financing rate (SOFR) printed at 3.62% on Sept. 16, the day the Federal Reserve announced a rate hike, down from 3.64% the prior day. The effective federal funds rate held at 3.63% on both days.
SOFR Edges Down to 3.62% on Fed Rate-Hike Day
SOFR easing on the very day the Fed tightened is the detail that matters: it suggests the hike was already priced into money markets and that repo collateral remains abundant, rather than signalling a policy surprise. The two-basis-point gap between SOFR and the effective funds rate is where funding stress usually surfaces first, so this spread is the number to track. Whether SOFR stays below the funds rate in coming sessions is the open question for anyone watching dollar liquidity.
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