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SOFR
(Secured Overnight Financing Rate)
The SOFR is a benchmark interest rate that measures the cost of borrowing cash overnight collateralized by U.S. Treasury securities. It replaced the LIBOR as the primary reference rate for dollar-denominated derivatives and loans in 2023.
Published daily by the Federal Reserve Bank of New York, SOFR is based on actual transactions in the repurchase agreement (repo) market, making it more transparent and reliable than survey-based rates. Financial institutions use SOFR for pricing everything from adjustable-rate mortgages to complex derivatives, with over $200 trillion in contracts now referencing it globally.
Published daily by the Federal Reserve Bank of New York, SOFR is based on actual transactions in the repurchase agreement (repo) market, making it more transparent and reliable than survey-based rates. Financial institutions use SOFR for pricing everything from adjustable-rate mortgages to complex derivatives, with over $200 trillion in contracts now referencing it globally.