Secured Overnight Financing Rate rises to 4% on September 17

Secured Overnight Financing Rate: The Secured Overnight Financing Rate is a benchmark interest rate reflecting the cost of borrowing cash overnight collateralized by U.S. Treasury securities, calculated and published daily by the Federal Reserve Bank of New York. It serves as the primary reference rate for a wide range of financial products following the LIBOR transition. This news item reports the rate's daily value in a market preparation context amid broader short-term funding developments. Benchmark Role: SOFR functions as the main reference rate for most new U.S. dollar floating-rate loans, derivatives, and securitizations. Policy Linkage: Recent Federal Reserve monetary policy decisions directly influence movements in SOFR and related overnight funding markets. Publication Source: The rate is produced daily from transaction data by the Federal Reserve Bank of New York.