SOFR remains steady at 5.33%, with options trading predicting the Federal Reserve to stand pat until the end of 2025

According to data from the Federal Reserve Bank of New York, the secured overnight financing rate (SOFR) on the last trading day (July 3) was reported at 5.33%, the same as the day before. The effective federal funds rate on the last trading day was reported at 5.33%, the same as the day before. Based on open interest in SOFR options trading, downward hedging suggests that the Federal Reserve will likely stay put until the end of 2025. According to Lou Crandall, an economist at Wrightson ICAP, market demand for the Federal Reserve's overnight reverse repurchase agreements (RRP) rebounded to above $600 billion at the end of the second quarter, and is expected to continue to decline for the remaining time in July. (Bloomberg)