SOFR and Libor have continued to edge higher
SOFR and Libor have continued to edge higher. SOFR posted a 1.750% rate for Thursday, versus 1.74% previously. The 3-month Libor rate was fixed at 2.32461% for April 4, versus 2.32084% on Tuesday, which makes for a 41st consecutive increase, the longest since November 2005. The same culprits are largely still impacting, including heavy bill supply despite some seasonal, tax-related cut backs, expectations of cash repatriation, Fed balance sheet normalization, and forecasts for a modest upward sloping Fed funds curve. And analysts continue to downplay any worrisome signals from the Libor increases, versus back in late 2009 when the rate was a harbinger of liquidity problems. Meanwhile, the Libor-OIS spread widened fractionally to 59.3 bps from 59.2 bps Tuesday. In repo, general collateral trades at 1.83%, with the current 10-year note trading at 1.66%, the lowest across the curve.