Secured Overnight Financing Rate
This dataset tracks secured overnight financing rate over time.
Latest Value
4.34
Year-over-Year Change
1.40%
Date Range
4/3/2018 - 8/6/2025
Summary
The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight, collateralized by Treasury securities in the repurchase market. It serves as a critical benchmark replacing LIBOR and provides a more robust reference rate for financial contracts and derivatives.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
SOFR represents the weighted average of transactions in the Treasury repurchase agreement market, reflecting actual lending costs in a deep, liquid market. Economists and financial institutions use it as a more transparent and transaction-based reference rate compared to previous benchmarks.
Methodology
SOFR is calculated daily by the Federal Reserve Bank of New York using data from a broad range of overnight Treasury repo transactions.
Historical Context
This rate is increasingly used in setting interest rates for loans, derivatives, and other financial instruments across the banking and financial services sectors.
Key Facts
- Introduced in 2018 as a replacement for LIBOR
- Based on actual transactions in the repo market
- Considered more reliable and transparent than previous benchmark rates
FAQs
Q: What makes SOFR different from LIBOR?
A: SOFR is based on actual transactions in the repo market, while LIBOR was based on bank submissions. This makes SOFR more transparent and less susceptible to manipulation.
Q: How often is SOFR calculated?
A: SOFR is calculated and published daily by the Federal Reserve Bank of New York, providing a current snapshot of overnight borrowing costs.
Q: Why do financial institutions use SOFR?
A: SOFR provides a more reliable and representative benchmark for pricing loans, derivatives, and other financial instruments based on actual market transactions.
Q: How does SOFR impact consumer loans?
A: Many adjustable-rate mortgages and other consumer loans are now being priced using SOFR instead of LIBOR, potentially affecting interest rates for borrowers.
Q: Are there different types of SOFR?
A: Yes, there are different SOFR rates, including daily SOFR, 30-day average SOFR, and term SOFR, each serving different financial needs.
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Similar SOFR Trends
Citation
U.S. Federal Reserve, Secured Overnight Financing Rate [SOFR], retrieved from FRED.
Last Checked: 8/1/2025