The Real Cash Crunch and False Alarms: Why Did SOFR Surge While U.S. Stocks Didn’t Crash?【Master Cheng Tan Lecture 3.4】

Many people instinctively think when SOFR surges and repo rates spike:

“There’s a problem with dollar liquidity.”

“Are risk assets about to crash?”

But the reality might not be so simple.

In September 2019, the U.S. repo rate once soared by 300 bps;

In October 2025, SOFR once again experienced an abnormal spike.

Yet in both instances, U.S. equities didn’t see a systemic plunge,

Gold didn’t collapse; and U.S. Treasuries also didn’t suffer from broad liquidity stress.

Why?

Because a “lack of funds” in the repo market doesn’t mean the whole financial system is “short of money.”

What’s truly important isn’t SOFR itself, but whether a liquidity shock is starting to transmit to the broader financing markets.

In this lesson, Tan Cheng, founder of Tantu Macro, will systematically explain —

What a real credit crunch is;

What is just short-term disturbance caused by month-end, taxes, or debt issuance;

Why some SOFR spikes are worth caution while others are nothing to worry about;

And, above all, which liquidity indicators really determine whether risk assets are at risk.