SOFR Rate

Definition ∞ The SOFR rate is the Secured Overnight Financing Rate, a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. This benchmark interest rate is published by the Federal Reserve Bank of New York and serves as a replacement for LIBOR in various financial products. The SOFR rate reflects short-term funding costs in the repurchase agreement market. It is a critical reference rate for a wide array of financial contracts.
Context ∞ The SOFR rate is a significant macroeconomic indicator influencing global financial markets, including indirectly impacting the broader digital asset landscape. News often covers changes in the SOFR rate as it relates to central bank monetary policy and its effects on borrowing costs. Understanding this rate helps in assessing the cost of capital and its potential influence on investment decisions across asset classes.