A period-specific SOFR (secured overnight financing rate) forward-looking term rate, that is published for periods of 1, 3, 6 or 12 months. It is derived and implied from futures trading in SOFR, which is used as a measure reflecting the cost of overnight borrowing in the U.S. Treasury repo market. Term SOFR is commonly used in loan agreements as a reference rate for dollar-denominated loans with tenors (terms) of one, three, or six months and up to twelve months.

Unlike its original version, SOFR, that is technically more of an overnight SOFR, term SOFR (aka CME term SOFR) is a forward-looking rate based on SOFR futures.

Overnight SOFR is a retroactive rate, i.e., it tends to move after a Fed hike (prime or Fed funds), while term SOFR is a proactive rate, meaning it moves in anticipation of a Fed hike (in that sense, it is similar to LIBOR).