New York Fed's SOFR Tweaks Seek 'Cleaner Read' as Market Evolves.

The Federal Reserve Bank of New York is making adjustments to the Secured Overnight Financing Rate (SOFR) benchmark to ensure its stability as the overnight lending market transitions to more central clearing. Changes include removing certain transactions between affiliated institutions and adjusting the influence of "specials" transactions to reduce day-to-day variability. These modifications aim to provide a clearer understanding of daily SOFR volumes and maintain the benchmark's viability in response to evolving market conditions and regulatory requirements. Wall Street experts acknowledge the necessity of these changes and anticipate further adjustments to SOFR as the repo market continues to evolve. [Extracted from the article]