It's now been three years. Milei came to power in part because of widespread discontent over inflation of 45% y/y on average during the half-decade leading up to 2023. Fast forward to end-2026, and inflation is still running at nearly 35% y/y with similar rates of money and credit growth - i.e., virtually no net progress at all, despite a dramatic fiscal adjustment and a relatively stable currency. What is going on, and will inflation ever normalize?

The optimistic view is that we're "on the cusp", i.e., that the combination of budget austerity, central bank tightening and a stable peso will eventually do its job, and things will look much better in the first half of 2027.

The pessimistic view is that ... we need a new model. If that doesn't happen, however, then we're left with the conclusion that (i) the authorities have essentially lost control of financial policy, and (ii) we need a new model of what drives money and credit behavior.