SOFR

Economics

Secured Overnight Financing Rate — the replacement for USD LIBOR in US dollar-denominated financial contracts.

Sources

1. Federal Reserve Bank of New York — SOFR newyorkfed.org accessed 23 September 2026

The New York Fed defines SOFR as “a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities”. It is built from actual transactions — trades in the Broad General Collateral Rate, bilateral Treasury repo cleared through FICC’s Delivery-versus-Payment service, and GCF Repo data — and calculated as a volume-weighted median. “The New York Fed publishes the SOFR on the New York Fed website at approximately 8:00 a.m. ET” each business day. Being transaction-based and secured is the whole point of the design: it is what a panel-quoted, unsecured rate was not.

The administrator’s own description. SOFR is an overnight USD rate; term SOFR and averages are separate products and are not described here.

Related terms

• Balance of Payments
• Credit Rating
• Current Account Deficit
• EURIBOR
• Exchange Rate
• Foreign Direct Investment

From the AJG lexicon archive (July 2026).