SOFR: Latest Reading, Historical Chart, Release Date & Investor Guide

Indicator Snapshot

What SOFR Measures

Secured Overnight Financing Rate measures the cost of borrowing cash overnight collateralized by U.S. Treasury securities. The indicator is published by Federal Reserve Bank of New York on a daily basis and is one of the primary datasets used by investors and economists to monitor this area of the economy.

A broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities, reported daily as a percent per annum. It is the main replacement for U.S. dollar LIBOR in many loans and derivatives.

Why Investors Watch SOFR

SOFR anchors a large volume of floating rate contracts, so its level and the spread to policy rates show how funding conditions are moving. Spikes around month ends or tax dates are read as signs of balance sheet or reserve pressure in repo markets.

The indicator's impact on financial markets depends on multiple factors: whether the reading was expected, the current economic regime, central bank policy stance, and investor positioning. A single data point is rarely sufficient to draw firm conclusions.

How SOFR Is Calculated

The New York Fed publishes it each business day as the volume-weighted median of transaction-level overnight Treasury repurchase agreement data, including tri-party repo, general collateral finance repo and bilateral repo cleared through the Fixed Income Clearing Corporation. It is released the following morning, and the figure reflects actual trades.

The official methodology documentation from Federal Reserve Bank of New York describes the full calculation process including sample design, weighting and revision procedures.

Reference: Federal Reserve Bank of New York: SOFR data and methodology

Release Schedule and Revisions

SOFR is typically released daily by Federal Reserve Bank of New York. Release dates are announced in advance through the official release calendar. Investors should monitor both the scheduled release dates and any unscheduled revisions.

This series is a market-observed price, rate or index level, so the published value is not normally revised after release. Check the publisher's notes for the occasional correction or methodology change.

How to Interpret SOFR Changes

When analyzing SOFR data, investors should consider multiple dimensions simultaneously:

• Changes in the rate mostly follow the Fed's policy range, so a move reflects either a policy decision or temporary pressure in the repo market for cash.
• Compare it with the target range, the interest on reserve balances and the reverse repo rate: SOFR sitting near the top of the range suggests tighter cash conditions.
• Month-end, quarter-end and Treasury settlement days often produce spikes, so a one-day jump is not necessarily a change in the policy stance.

Market Impact of SOFR

SOFR can influence multiple asset classes depending on its implications for economic growth, inflation, and monetary policy:

• Equities: Changes in SOFR can affect earnings expectations, discount rates and sector rotation preferences.
• Fixed income: The indicator may influence Treasury yields and credit spreads depending on its monetary policy implications.
• Currency markets: Divergence in SOFR across economies can affect relative currency valuations.
• Commodities: Economic activity indicators can affect commodity demand expectations and prices.

Historical Context

Secured Overnight Financing Rate has a long history that provides context for interpreting current readings. Key reference points include major economic cycles, recessions, recovery periods and policy regime changes. Historical comparison helps investors avoid placing excessive weight on any single data point outside its longer-run context.

Investors should be aware that methodology changes over time can affect comparability across long historical periods. The official Federal Reserve Bank of New York documentation will note any significant definitional or methodological changes.

Limitations of SOFR

Like all economic indicators, SOFR has limitations that investors should understand before drawing conclusions:

• It is based on secured overnight repo trades, so it reflects Treasury collateral lending and not unsecured bank credit risk, unlike the old LIBOR it replaced.
• It is an overnight rate published the next morning, so loan pricing uses averages or term versions, which are separate series and are not the same number.
• No single indicator captures the full complexity of economic conditions, so read this series next to the ones linked below.

Related Economic Indicators

SOFR is best interpreted alongside related indicators that provide complementary perspectives on the cost of borrowing cash overnight collateralized by U.S. Treasury securities. Confirming or diverging signals across related indicators help investors form more robust views of the economic environment.

• Effective Fed Funds Rate
• Fed Funds Target Range
• IORB
• ON RRP Rate

See the Monetary Policy And Rates indicators section and the Macro & Market Regimes hub for broader context and related data.