LIBOR was built on estimates banks could fake. SOFR — its replacement — is built on actual trades. It's the rate banks pay to borrow cash overnight against US Treasury bonds. Real transactions, not what banks claim they'd pay.
When SOFR spikes, cash is getting scarce and liquidity is draining from the system. That's a risk-off signal for the entire market. Interbank rates are a fear gauge — the lesson survived the scandal.
This maps to Module 6.1 — Macro Indicators and Sentiment.
For educational purposes only. Not financial advice. Past performance does not guarantee future results. Trading involves risk. Consult a qualified financial adviser before making investment decisions.
I'm Russell Larke — BA (Hons) Business Management, currently completing an MSc in Systems Thinking in Practice, with plans to pursue a doctorate. I've run an environmental consultancy as Managing Director and have traded financial markets for years. I teach the Larke Cycle — a testable framework for understanding market structure beyond chartism. Regards, Russell Larke BA (Hons) Business Management | MSc Candidate (Systems Thinking) Beyond the Chart
What Is SOFR? The Rate That Replaced LIBOR
LIBOR was built on estimates banks could fake. SOFR — its replacement — is built on actual trades. It's the rate banks pay to borrow cash overnight against US Treasury bonds. Real transactions, not what banks claim they'd pay.
When SOFR spikes, cash is getting scarce and liquidity is draining from the system. That's a risk-off signal for the entire market. Interbank rates are a fear gauge — the lesson survived the scandal.
This maps to Module 6.1 — Macro Indicators and Sentiment.
https://youtu.be/nWZUuAuE4jo
Key Takeaways
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For educational purposes only. Not financial advice. Past performance does not guarantee future results. Trading involves risk. Consult a qualified financial adviser before making investment decisions.
I'm Russell Larke — BA (Hons) Business Management, currently completing an MSc in Systems Thinking in Practice, with plans to pursue a doctorate. I've run an environmental consultancy as Managing Director and have traded financial markets for years. I teach the Larke Cycle — a testable framework for understanding market structure beyond chartism. Regards, Russell Larke BA (Hons) Business Management | MSc Candidate (Systems Thinking) Beyond the Chart