Core Points - The Trump administration is increasing support for Argentina's Milei government, with a new $20 billion private sector financing tool being prepared to support Argentina's debt market, alongside a previously announced $20 billion currency swap agreement, bringing total U.S. aid to approximately $40 billion this month [1][2] - U.S. Treasury Secretary Yellen confirmed that the new financing tool has been in preparation for several weeks and aims to help Argentina address upcoming debt repayments, with significant interest from banks and sovereign funds [2] - The U.S. Treasury has intervened in the foreign exchange market to support the Argentine peso, purchasing pesos for the second time in less than a week [1][3] Market Reactions - Following the announcement of U.S. support, Argentina's 2035 sovereign bonds rose nearly $0.02, trading above $0.59, while the peso briefly erased its losses [1] - Trump's comments linking U.S. aid to Milei's performance in the upcoming midterm elections caused market volatility, with the Merval index dropping over 4% and dollar-denominated bonds declining [4] Economic Context - The U.S. Treasury's intervention marks the first direct action in the foreign exchange market since 2011, emphasizing the urgency of supporting Argentina's economic reforms amid severe liquidity issues [3] - The currency swap agreement, valued at $20 billion, was finalized to provide immediate support to Argentina's economy, which is seen as strategically important to U.S. interests [3][5]