Argentina’s political landscape shifted dramatically on October 26, 2025, as President Javier Milei’s La Libertad Avanza (LLA) party clinched a resounding victory in the midterm congressional elections. The results, which saw LLA win more than 40% of the national vote and claim victory in 15 of Argentina’s 24 electoral districts, sent shockwaves through markets, invigorated Milei’s reform agenda, and reverberated across international political circles, particularly in Washington.
The closely watched midterms followed a setback for Milei’s party in the September Buenos Aires provincial elections, stoking concerns about the durability of his radical libertarian project. But by Sunday night, it was clear: LLA had not only bounced back but had exceeded even the president’s own expectations. “I’m surprised by the result, honestly,” Milei admitted in a television interview, as reported by the Associated Press. The party’s nearly 41% share of the lower house vote left the Peronist coalition trailing at 32%—a stunning reversal for the long-dominant opposition.
Markets responded with exuberance. Investors who had been dumping the beleaguered peso in anticipation of a Milei defeat scrambled to buy back in. The currency surged more than 10% on October 27, closing 3% higher at 1,460 pesos per dollar. Argentina’s local Merval stock index soared 21% at closing, and dollar-denominated government bonds set to expire in 2035 shot up as much as 14 cents during trading hours. As the AP noted, “perhaps never in history has a limited Argentine legislative election generated so much interest abroad, both in Washington and on Wall Street.”
This economic rally came after a period of deep uncertainty. In the week before the vote, the peso had plunged to a record low—over 1,500 against the dollar—reflecting investor anxiety about a possible return to populist, budget-busting policies if Milei faltered. Instead, Milei’s victory appeared to validate his harsh austerity measures: slashing government spending, deregulating the economy, and taming runaway inflation, albeit at the cost of painful job losses and eroded purchasing power for millions of Argentines.
Yet, while markets cheered, Argentine voters seemed less enthused. Turnout was just 67.9%, the lowest in any national election since Argentina’s return to democracy in 1983. Analysts say this apathy signals not so much a ringing endorsement of Milei’s economic cutbacks as a rejection of Peronism. Former Economy Minister Martín Guzmán told the AP, “What we saw was a rejection of Peronism by a significant portion of the electorate. This doesn’t mean that Argentine society is enchanted with the economic policy of the government.”
Politically, the results give Milei’s administration a much stronger hand in Congress. LLA more than doubled its representation, reaching its own one-third threshold in both houses. This bolsters Milei’s ability to push his libertarian economic reforms, though he still falls short of an outright majority. As Alejandro Catterberg, a political analyst with Poliarquía Consultores, observed in Americas Quarterly, “He gained popular backing, exceeded expectations, and delivered a moderate speech emphasizing the need to seek agreements. He has a clear path to build majorities in Congress if he restores dialogue with actors who—especially after this victory—have renewed incentives to return to the negotiating table.”
Indeed, Milei’s post-election remarks struck a notably conciliatory tone. Gone was the brash rhetoric that had characterized much of his campaign. Instead, he called for building consensus with governors and moderate opposition parties, recognizing that coalition-building would be crucial to advancing reforms. “The government has recognized that without building agreements, it lacks the institutional strength to push reforms forward,” Catterberg noted.
The economic context is equally pivotal. According to Pilar Tavella, director at Balanz, Argentina’s primary balance is running a surplus, the monetary overhang has been dramatically reduced, and the FX pass-through to inflation is lower. These improvements, coupled with support from the U.S. Treasury, have created a more favorable environment for further foreign exchange flexibilization. Tavella argued in Americas Quarterly that “support from the U.S. Treasury offers an important buffer to prevent the Argentine peso from overshooting if more flexibility is embraced.”
That U.S. backing has been both generous and controversial. Just days before the vote, Washington finalized a currency-stabilization deal worth at least $20 billion to support the peso—a move widely seen as tying U.S. credibility to Milei’s economic experiment. President Donald Trump, whose administration pledged up to $40 billion in support, made no secret of his involvement. “He had a lot of help from us,” Trump said to reporters, according to the AP. “He’s working against 100 years of bad policies, and he’s going to break them, thanks to support from the United States.”
Trump’s intervention didn’t go unnoticed abroad. Congratulations poured in from right-wing leaders, including Italy’s Giorgia Meloni and Israel’s Benjamin Netanyahu, who told Milei, “You dared, you won.” But not all reception was positive. Democrats on Capitol Hill criticized the rescue package as a political favor at a time when U.S. federal workers faced a government shutdown. American cattle ranchers and farmers, wary of the administration’s promises to buy Argentine beef and the broader trade implications, also voiced their concerns. Rohit Chopra, former head of the Consumer Financial Protection Bureau, warned, “The fund is not supposed to be a slush fund for influencing elections or for foreign policy purposes. U.S. involvement will continue to put American taxpayers at risk without authorization.”
Despite the controversy, the U.S. administration sees Argentina’s stability as strategically vital. Trump argued that the election’s outcome “made a lot of money for the United States,” pointing to the surge in Argentine bonds and improved debt ratings. Meanwhile, analysts like Monica de Bolle of the Peterson Institute for International Economics cautioned that Milei’s newfound strength “doesn’t get him out of the woods in any way, shape or form.” She added, “In the short term they’ll be OK, they have all this money being thrown in their direction now, but there will come a point where we’ll see the same sort of turmoil that we saw a month ago and the question will be, what will the U.S. do?”
Globally, Milei’s victory is being watched as a referendum on libertarian governance. As Steven E. Hendrix wrote in Americas Quarterly, “Milei remains the world’s only self-described ‘anarcho-capitalist’ leader, with his ‘chainsaw plan’ an emblem of radical fiscal austerity. This strong midterm result signals that disruptive economics can retain democratic legitimacy—at least for now.”
Milei’s administration now faces a critical test: Can it translate electoral momentum and international backing into durable reforms, or will Argentina’s chronic volatility reassert itself? The coming 18 months will reveal whether Milei’s libertarian revolution deepens through compromise or fractures under pressure. For now, Argentina’s markets are booming, its political establishment is reeling, and all eyes are on what comes next.