On October 9, 2025, the United States Treasury made a move that sent shockwaves through global financial markets: it directly purchased Argentine pesos and finalized a $20 billion currency swap framework with Argentina’s central bank. The announcement, made by Treasury Secretary Scott Bessent on social media, was nothing short of extraordinary—a rare intervention designed to stabilize Argentina’s rapidly deteriorating economy and, perhaps not coincidentally, to shore up the standing of President Javier Milei, a close ally of U.S. President Donald Trump, ahead of crucial midterm elections.
“The U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets,” Bessent declared, according to the Associated Press. The deal, hammered out over four days of intense meetings in Washington D.C. between Bessent and Argentine Economy Minister Luis Caputo, marks the first time in years that the U.S. has intervened so directly in a Latin American currency crisis.
Argentina’s financial woes are no secret. The country is the largest borrower from the International Monetary Fund, with a staggering $41.8 billion in outstanding credit as of August 31, 2025. Recent months have seen the Argentine peso tumble more than 6% in a single day—its sharpest drop since September 8—while foreign currency reserves have been rapidly depleted in a desperate attempt to defend the currency. Investors have been dumping Argentine stocks and bonds, and the country faces billions in debt payments due in the coming months.
President Milei, who swept into office in late 2023 on promises to slash public spending and tame runaway inflation, has implemented a radical austerity program. While these measures have been welcomed by international investors and the IMF, they’ve been deeply unpopular at home, with many Argentines seeing their purchasing power erode and the economy sliding toward recession. The pain has only intensified as the October 26 midterm elections approach—a vote that could decide the fate of Milei’s free-market experiment.
On the day of the U.S. announcement, financial markets responded with a burst of optimism. Argentine dollar-denominated bonds jumped about 10%, and the Buenos Aires stock market surged 15%. Caputo, Milei’s economy minister, expressed his “deepest gratitude” to Bessent, writing, “Your steadfast commitment has been remarkable.” Milei himself took to social media to thank both Bessent and Trump for their “strong support” and “powerful leadership,” adding, “Together, as the closest of allies, we will make a hemisphere of economic freedom and prosperity.”
But not everyone was celebrating. The intervention has ignited fierce debate in the U.S., where critics from both sides of the aisle questioned why American resources were being used to prop up a foreign government—especially one that has benefited from surging soybean exports to China, often at the expense of U.S. farmers. Democratic Senator Elizabeth Warren was particularly scathing, stating, “It is inexplicable that President Trump is propping up a foreign government, while he shuts down our own. Trump promised ‘America First,’ but he’s putting himself and his billionaire buddies first and sticking Americans with the bill.”
Warren wasn’t alone. A group of Democratic senators quickly introduced the “No Argentina Bailout Act,” aiming to prevent the Treasury Department from using its Exchange Stabilization Fund to assist Argentina. Meanwhile, Republican Senator Chuck Grassley voiced the frustrations of American farmers, asking, “Why would USA help bail out Argentina while they take American soybean producers’ biggest market?”
For his part, Bessent has insisted that the deal is not a bailout. Speaking on Fox News, he argued that the peso was undervalued and that the intervention was about maintaining U.S. strategic interests in the Western Hemisphere. “A strong, stable Argentina which helps anchor a prosperous Western Hemisphere is in the strategic interest of the United States,” he said, according to BBC News. “Their success should be a bipartisan priority.”
Bessent, who earned his reputation as a currency trader during the infamous “Black Wednesday” crisis in 1992, has been adamant that U.S. action was necessary to prevent Argentina from becoming a “failed state.” He also dismissed suggestions that the support was designed to help wealthy investors with ties to his own network, telling CNBC, “This trope that we’re helping out wealthy Americans with interests down there couldn’t be more false. What we’re doing is maintaining U.S. strategic interest in the Western hemisphere.”
The Treasury Department, however, has been tight-lipped about the specifics—declining to reveal exactly how many pesos were purchased or the precise terms of the $20 billion swap line. That opacity has only fueled suspicions among some observers that the timing of the intervention, so close to Argentina’s midterms, was more about politics than policy. As Al Jazeera noted, many saw the move as a pre-election reward for a loyal Trump ally rather than a sound investment in a strategic partner.
Internationally, the deal has been met with cautious optimism. The IMF and other lenders have long pressed Argentina for fiscal discipline, and Milei’s reforms—while painful—have been praised for reining in inflation and moving the country toward a fiscal surplus. Investors, including some with ties to Bessent such as Robert Citrone, have bet on Milei’s libertarian agenda, hoping it will finally deliver stability after years of turmoil and repeated defaults (Argentina has defaulted three times since 2001, most recently in 2020).
Yet the risks remain high. Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, told Al Jazeera that while the U.S. support “bought some time for Milei,” it is “a lifeline, but not a panacea.” Abadia warned that inflation risks remain on the upside, and that if Milei performs poorly in the October elections, “the negative political and financial noise would rush back. That would be a grim scenario for Milei.”
Domestically, the controversy over the U.S. intervention shows no sign of abating. With Trump’s “America First” agenda under renewed scrutiny and both farmers and progressives up in arms, the coming weeks are likely to see even fiercer debate over America’s role in the world—and whether strategic interests abroad should ever come at the expense of voters at home.
As Argentina’s midterm elections draw near, the stakes could hardly be higher. For Milei, the U.S. financial lifeline may offer a brief reprieve from economic chaos. For the U.S., the question remains: was this a bold move to anchor hemispheric stability, or a risky bet on a controversial ally?