The US Treasury’s liquidity has not drained, but reserves have risen, easing concerns that bond splurge may constrain credit.

The Fed Treasury General Account has grown by $460 billion since early June.

Government borrowing usually decreases demand for the Fed’s overnight reverse repo program (ON RRP), which helps money market funds lend to the Fed.

The risk of reserve scarcity has receded as more cash has left the RRP facility.

Demand for the ON RRP has consistently declined from $2.3 trillion in May to $1.7 trillion on Friday.

As the Fed reduces its bond holdings by almost $100 billion a month, officials are tracking the combined reserve and ON RRP balances to gain a better picture of sector liquidity.