Rajan suggests that a central bank's reluctance to aggressively fight inflation may stem from a fear of being blamed for a potential recession. In a politically charged environment, the institutional risk of becoming the 'fall guy' can subtly influence policy, leading to a more dovish stance than economic data alone would suggest.

While Donald Trump may treat departments like Education or Defense as a "joke," he appears to take economic roles like the Fed Chair more seriously, appointing actual economists. This suggests he sees the economy as a direct, tangible scorecard of his success, requiring a baseline of competence that other areas do not.

Unprecedented US financial support, likened to Draghi's "whatever it takes," has successfully created a circuit breaker for Argentina's negative market feedback loop. However, this support only addresses financial symptoms (FX and credit risk) and cannot solve the underlying political uncertainty about the government's ability to implement reforms.

The recent $20 billion U.S. Treasury support for Argentina was not a reactive bailout for a failing program. It was a pre-planned "big bazooka" to counter a politically-motivated speculative attack on the peso ahead of midterm elections, making it prohibitively expensive to bet against the country's stability.

Argentina's President Javier Milei uses a chainsaw at rallies not just for shock value, but as a potent symbol. It simultaneously represents the problem (excessive government spending) and his proposed solution (slashing the budget), creating a simple and resonant message for voters weary of economic jargon.

Contrary to market fears of undisciplined spending akin to 'Abenomics', Prime Minister Takaichi's initial policy platform suggests a focus on targeted income redistribution. Policies like a refundable credit tax system and cutting unnecessary subsidies indicate a fiscally neutral or even tighter stance, rather than net fiscal expansion.

Knowing they would perform well in Buenos Aires, the Peronist party strategically held an early local election. They correctly anticipated President Milei would over-promise on his party's performance, creating a negative market reaction when he under-delivered, thereby executing a "perfectly executed attack" on his program's stability.

Despite political polarization, FX volatility is expected to be less than half of the 20% depreciation seen in the last cycle. This is due to a less tense social fabric, more moderate economic agendas, and strong institutions that have proven effective at limiting executive power and radical reforms.

Figures like Donald Trump don't create populist movements; they rise by capitalizing on pre-existing societal problems like economic despair. Focusing on removing the leader ignores the root causes that allowed them to gain power, ensuring another similar figure will eventually emerge.