SOFR Spikes to 5.42% as Quarter-End Repo Squeeze Exposes Collateral Scarcity

2026-11-06, FP360 — The Secured Overnight Financing Rate (SOFR) spiked to 5.42% on Thursday, a 12-basis-point jump from the prior session, as quarter-end balance sheet window dressing collided with a $52 billion drain in overnight repo liquidity. The move, the largest single-day increase since March 2020, forced dealers to pay up for collateral and raised questions about the Federal Reserve's shrinking balance sheet.

The Signal: Expect short-term funding stress to persist, pressuring risk assets and steepening the yield curve as dealers hoard cash.

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Originally published on FINPULSE 360