Secured overnight finance rate Vs. LIBOR

The secured overnight financing rate, or SOFR, is an influential interest rate that banks use to price U.S. dollar-denominated derivatives and loans. The daily SOFR is based on transactions in the Treasury repurchase market, where investors offer banks overnight loans backed by their bond assets. The New York Federal Reserve began publishing the rate in April 2018 as part of an effort to replace LIBOR, a long-standing benchmark rate used around the world.