Easing of trading curbs is no quick fix for term SOFR swaps
ARRC’s new guidelines will do little to improve liquidity, but may keep a lid on spiralling basis
The relaxation of restrictions on trading swaps linked to a term version of the secured overnight financing rate (SOFR) may not do much to close the basis with overnight equivalents – though it could prevent the pricing discrepancy from spiralling out of control.
Last month, the Alternative Reference Rates Committee – the Federal Reserve-backed group tasked with steering markets away from US
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