Milei’s one-year anniversary, Brazil’s jumbo rate hike

Argentinian President Javier Milei's first year in office has been much more successful than we (and other analysts) had expected but, absent a weaker exchange rate, it will be difficult to return the economy to growth while sustaining the progress that’s been made so far. Elsewhere, the Brazilian central bank's jumbo rate hike this week failed to stop the slide in the real, suggesting that the central bank can only do so much; crucially, the government needs to now show a clear willingness to rein in spending. Failure to do so will keep the real on the backfoot.