Goldman Sachs Sees Another SOFR Spike on Record Treasury Deluge

Goldman Sachs Group Inc. said US money markets this week are heading toward what’s becoming an increasingly common month-end ritual: a sharp — if brief — jump in overnight lending rates as Wall Street banks absorb a huge pile of new Treasuries.

A record slate of auction settlements coming Thursday will pull large amounts of cash away from banks just as they bolster capital holdings to satisfy regulatory requirements, threatening to reduce the amount that’s free to be lent out through overnight repurchase agreements.

The monthly bond sales have been causing a fairly predictable jump in the the Secured Overnight ...