Jim Grant on BTFP: "the Fed is bailing out its previous bailout"

[W]ith the unveiling of the Bank Term Funding Program, the Fed is bailing out its previous bailout.  It's lending against the par value of bonds and mortgages that don't trade near par.  They don't trade near par because their too-high prices were eviscerated in 2022.  Their too-high prices were eviscerated because of the inflation that the central bankers helped to foment and, indeed, fan.  Thus, one intervention begets another.

~ Jim Grant, "Into the federal vortex," Grant's Interest Rate Observer, March 24, 2023