A type of SOFR (secured overnight financing rate) that covers the span (maturity) of one day. By default and in its basic form, SOFR is an overnight rate. It is the rate at which institutions can borrow US dollars overnight while posting US Treasury securities as collateral.
As opposed to term SOFR, which is a proactive rate, i.e., it moves in anticipation of a Fed hike (in that sense, it is similar to LIBOR), overnight SOFR is a retroactive rate, i.e., it tends to move after a Fed hike (prime or Fed funds).
Term SOFR is implied by determining projected overnight SOFR rates based on futures pricing, and then compounding the resulting rates daily over a specific term (such as, one, three, six or twelve months.)
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