Marina Lyubimova
SOFR is calculated and published by the Federal Reserve Bank of New York using transactions in the U.S. Treasury repo market. It has replaced USD LIBOR as the main reference rate for a large share of dollar-denominated floating-rate contracts.
SOFR Remains Inside the Fed's Rate Range
The Federal Reserve kept the federal funds target range at 3.50%-3.75% at its July 29, 2026 meeting. Interest paid on reserve balances is 3.65%.
That puts the latest rates at:
| Benchmark | Rate |
| SOFR— August 13 | 3.62% |
| SOFR — August 12 | 3.62% |
| Fed funds target | 3.50%-3.75% |
| Interest on reserve balances | 3.65% |
SOFR is therefore 3 basis points below the interest rate paid on reserve balances and 12 basis points above the bottom of the Fed's target range.
SOFR Has Stayed Near 3.6%
The latest reading continues the narrow range seen in recent months. SOFR was 3.60% on June 11, compared with 3.59% on June 10 and 3.63% on June 8. In July, it was 3.60% on July 13, 3.63% on July 14, 3.64% on July 15 and 3.62% on July 16. The August 13 rate of 3.62% therefore remains close to levels recorded in June and July.
Why the 3.62% Rate Matters
SOFR is based on actual secured overnight transactions rather than bank estimates. Daily transaction volumes underlying the benchmark can exceed $1 trillion, making it one of the most transaction-heavy interest-rate benchmarks in the world.
The rate is used directly or indirectly in floating-rate corporate loans, derivatives, securitized products and other dollar contracts. A loan priced at SOFR + 2 percentage points, for example, would have a benchmark-based rate of approximately 5.62% at the current SOFR level, before any other contractual adjustments.
The daily 3.62% figure should not be confused with Term SOFR. The New York Fed also publishes compounded 30-, 90- and 180-day SOFR averages and the SOFR Index, while forward-looking Term SOFR rates are separate benchmarks.
What Can Move SOFR
Federal Reserve policy is the main anchor for overnight U.S. interest rates. SOFR can also move because of changes in Treasury collateral supply, bank reserves, demand for cash and repo-market balance-sheet capacity.
The Fed's next policy moves therefore remain the main factor for the longer-term direction of SOFR.
Marina Lyubimova
