AWARDS
What is the 3Y SOFR swap spread trying to tell us??? ➡️ The 3Y SOFR swap spread refers to the difference between the yield on 3-year US Treasuries and the fixed portion of a 3-year SOFR interest rate swap. SOFR (Secured Overnight Financing Rate) is a benchmark interest rate based on overnight borrowings backed by US Treasuries. It has replaced LIBOR as the primary benchmark for US dollar interest rate derivatives. ? Why does it matter? ? A positive spread suggests higher credit/liquidity risk in the swap market than in Treasuries. ? A negative spread can suggest technicals, strong demand for Treasuries, or dislocations in the market. ? Powell may pretend he doesn't need to get involved, but the market is about to force him to... Source: zerohedge C.H.MONCHAU
