Trump Says Milei's Argentina Win "Made A Lot Of Money" For U.S.
Earlier this month, US Treasury Secretary Scott Bessent arranged a $20 billion currency swap with Argentina's central bank to stabilize the country's bond market ahead of Sunday's elections. The midterm results were surprising, as President Javier Milei's party scored a major comeback, and the move may now pay dividends for the US.
Goldman analyst Clara Mourey provided clients with midterm election results:With 94% of ballots counted, President Milei's party, La Libertad Avanza, received 40.8% of the votes, above expectations, and will increase its representation in Congress starting December 10, up from the current 10% in the Senate and 15% in the Lower House. Importantly, the government's representation would exceed the one-third threshold in the lower house, and together with allies also in the Senate. This outcome would enhance the President's veto authority and bolster governability.
The left-wing coalition Fuerza Patria received 24.4% of the votes, and together with other Peronist groups reached 31.6% of the votes. Finally, the group of governors united under the Provincias Unidas coalition received 7.0% of the vote.
Aboard Air Force One earlier while on his Asia tour, Trump told reporters that Sunday's midterm election results were a "big win" for Milei's party. "Not only did he win, he won by a lot."
Trump's backing of Milei is part of a strategic political shift across Latin America, following decades in which failed socialist leaders sent the country's economy into the dumps.
One of Bessent's bets included over $1 billion in peso purchases, according to Bloomberg estimates, which appears to have paid off.
The nation’s debt jumped across the curve in early trading, with dollar notes due in 2035 up more than 13 cents to trade at a record 70.34 cents on the dollar.
A stronger Argentine currency in Monday's trading session will mean the US could net hundreds of millions of dollars in gains.
"That election made a lot of money for the United States," Trump said Monday. "The bonds have gone up," he said. "The whole debt rating has gone up."
Goldman's Mourey continued:
"The election results improve the outlook for structural reforms in the second half of the Administration. Following the election, investors will monitor any shifts to the government's economic policy mix, especially those related to the exchange rate and monetary regime. In the months leading up to the elections, Argentine assets were affected by heightened political and policy uncertainty." In a separate note earlier, UBS analyst Matthew Cowley told clients:
"The peso is expected to appreciate post-election, alleviating currency pressure, though Argentina's $48 bn debt payments by 2027 remain a concern. A reinforced political mandate and potential foreign investment flows could stabilize reserves and support international debt market re-entry. Milei's victory signals optimism for Argentina's economic trajectory, with key reforms now more likely to advance." Bessent told reporters earlier, "Now I think the market is going to take care of itself and it's going to have a lot of confidence in his policies," referring to Milei, adding, "They have some big refinancings next year, but the Argentinian people have spoken."
The Wall Street Journal reviews the significance:That means it should secure at least one-third of the seats in both chambers—the critical threshold that allows Milei to preserve his veto power and defend his sweeping decrees. The result, stronger than most polls had predicted, gives Milei fresh political momentum after months of unrest over deep spending cuts and a grinding recession last year.
It also shores up his standing with Washington and the International Monetary Fund, which have tied future financial support to the survival of his austerity experiment. Market analysts expect Argentine bonds and the peso to rally when trading opens Monday, reflecting relief that Milei still has political traction. The U.S. announced a $20 billion currency swap this month to prop up Argentina’s currency and promised to raise another $20 billion from private banks and sovereign-wealth funds.
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