BUENOS AIRES, Argentina (AP) — Wall Street rallied Thursday as Argentina's President Javier Milei traveled to Italy for the Group of Seven summit, buoyed by his first legislative victory after the Senate passed sweeping proposals to slash state spending and boost his powers. Having hitched his political fortunes to the goal of cutting down Argentina's bloated state, Milei hailed the vote as a “triumph." Even so, opposition senators scrapped an income tax package and watered down other parts of the bill after a daylong debate marked by clashes between police and protesters in the capital of Buenos Aires.
The legislation aimed at overhauling Argentina’s long-troubled economy during its worst financial crisis in 20 years will return to Congress' lower house for final approval, where it's expected to become law. In a further boost to Milei's agenda, data released Thursday showed Argentina's monthly inflation rate halving to 4.2% in May, the lowest rate since January 2022.
The drop continues the string of declining inflation rates since Milei entered office last December, even as annual inflation remains at 276%, among the highest in the world. After the bill's passage, markets appeared reassured. Argentine sovereign bond yields jumped 3.
5% on the news, and Argentina’s country-risk index dropped more than 6% when markets opened. Argentina's currency, the peso, dipped to $1,220 on the black market, narrowing the gap between the official and informal exchange rates. At the s.