SOFR Index
SOFRINDEX • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
1.21
Year-over-Year Change
0.19%
Date Range
10/7/2021 - 8/6/2025
Summary
The SOFR Index tracks the cumulative compounded daily Secured Overnight Financing Rate (SOFR), providing a comprehensive measure of short-term borrowing costs in the U.S. financial markets. This index is crucial for understanding daily interest rate dynamics and serves as a key benchmark for financial contracts and economic analysis.
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
The SOFR Index represents a standardized measure of overnight borrowing rates, calculated by compounding daily SOFR rates. Economists and financial professionals use this index to assess short-term lending conditions and market liquidity. It has become increasingly important since replacing LIBOR as a primary reference rate.
Methodology
The index is calculated by the Federal Reserve Bank of New York through a volume-weighted median of transactions in the overnight repurchase agreement (repo) market.
Historical Context
This index is critical for pricing derivatives, determining adjustable-rate loans, and informing monetary policy decisions.
Key Facts
- Replaced LIBOR as the primary short-term lending benchmark in 2022
- Based on actual transactions in the repo market
- Provides a more transparent and robust interest rate measure
FAQs
Q: What makes SOFR different from previous benchmark rates?
A: SOFR is based on actual market transactions, unlike LIBOR which was based on bank submissions. This makes it more reliable and less susceptible to manipulation.
Q: How often is the SOFR Index updated?
A: The SOFR Index is updated daily, reflecting the most recent overnight financing rates in the U.S. financial markets.
Q: Why do financial institutions use the SOFR Index?
A: Financial institutions use the SOFR Index to price loans, derivatives, and other financial instruments with floating interest rates.
Q: How does the SOFR Index impact consumers?
A: The SOFR Index can influence the interest rates on adjustable-rate mortgages, student loans, and other consumer credit products.
Q: What are the limitations of the SOFR Index?
A: The index primarily reflects secured overnight lending and may not capture all market conditions or credit risk variations.
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Citation
U.S. Federal Reserve, SOFR Index [SOFRINDEX], retrieved from FRED.
Last Checked: 8/1/2025