5min chapter

Forward Guidance cover image

The Powell Put Won't Save Stocks | Joseph Wang

Forward Guidance

CHAPTER

The Fed's Transition to Sofer

Sofer is going to be the replacement for LIBOR today, but probably one day effort as well. The reference rate that they created was called SOFR, and that is an overnight repo rate based on Treasury collateral. It's a market-based rate; you can't get a very low post-GFC interest rate without manipulating it. You can see this from the Fed has now completely lost control of its borrowing tools.

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