The Federal Reserve delivered consecutive 25bp rate cuts in September and October 2025, its first easing steps since December 2024.
While both actions lowered the target range for policy rates, short-term funding markets responded differently. September’s move coincided with stable liquidity conditions, whereas the October cut was followed by brief volatility in overnight financing rates.

After the September meeting, SOFR declined steadily and remained anchored, reflecting orderly adjustment across repo markets. In the hours following October’s Fed decision, SOFR dipped immediately, then rebounded within 24 hours, indicating temporary liquidity tightness.

“This short-term volatility highlights how funding dynamics can momentarily offset the intended effect of policy easing, even as broader rate trends remain aligned with the Fed’s stance.” Jake Harmon, Regional Head of Product, US.

TraditionData’s Predictive Overnight Repo (TPOR) dataset showed a clear divergence between the two periods ahead of the market reaction, enabling users to identify and quantify liquidity fluctuations around key policy events.