Illustration: Eniola Odetunde/Axios

Barely five months into the year, U.S. investment-grade companies already have issued more than $1 trillion in debt — nearly as much as in all of 2019, which was well above average.

Why it matters: And buying shows no sign of letting up, thanks in large part to ultra-low interest rates and the Fed's promise of "no limit" purchases of Treasury, investment-grade corporate and even junk bonds.

What's happening: "Nearly $200 billion in debt has been issued in May so far as companies capitalize on growing risk-on attitudes," Bank of America research analysts said in a recent note to clients.

  • After $273 billion of outflows from bond funds in March, money has raced back into fixed income with positive inflows every week since mid-April, data from the Investment Company Institute show.

What to watch: Despite warnings of widespread downgrades, defaults and bankruptcies from various ratings agencies, credit analysts and the Fed itself, bond spreads are narrowing, indicating bullishness from investors as more of the U.S. economy opens for business.

  • "There's been a flood of issuance ... and the question is how much more can these spreads narrow," Subadra Rajappa, head of U.S. rates strategy at Société Générale, tells Axios. "My concern is that it seems like all this narrowing is a bit overdone."

Driving the news: Minutes from the Fed's latest policy meeting released Wednesday showed the central bank contemplating a program to cap the yields on short- and medium-term Treasuries known as yield-curve control — a policy employed by the Bank of Japan and Reserve Bank of Australia.

  • That would ensure borrowing costs stay low and likely encourage even more debt issuance from companies.

What could go wrong: Already warning that the economic damage from the pandemic will be deep and long-lasting, the Fed's latest financial stability report highlights the risk added by the growing corporate debt binge to exacerbate the coronavirus-driven recession.

Of note: Highly indebted "zombie" companies — firms that don't earn enough revenue to pay the interest on their debt — are one out of every six U.S. companies and currently control nearly 2.2 million jobs.

Flashback: "High levels of corporate debt likely won’t cause an economic downturn, but they may accelerate one as highly leveraged companies fail, forcing layoffs, decreasing aggregate demand and creating a downward spiral of bankruptcies and further layoffs," the U.S. Joint Economic Committee wrote in October 2019.

  • The committee cited Fed chair Jerome Powell himself, noting, “[a]highly leveraged business sector could amplify any economic downturn as companies are forced to lay off workers and cut back on investments.”

Go deeper: No, insurance doesn't cover that

Go deeper

Death spiral for consumers

Illustration: Eniola Odetunde/Axios

Despite some recent good news about dwindling household debt, the financial health of U.S. consumers is rapidly deteriorating — and families with children are faring the worst.

Why it matters: As Congress deadlocks over pandemic relief and President Trump issues executive orders of dubious potency, many Americans are suffering from a quintuple whammy: unemployment, overdue rent, mounting bills, food insecurity and health fears.

Dion Rabouin, author of Markets
6 mins ago - Economy & Business

Investors are betting the future is priced in euros

Illustration: Aïda Amer/Axios

It's the euro's time now — at least that's how investors have been positioning recently.

What's happening: Speculators have raised their bets to the highest in nine years that the dollar will fall and increased bullish bets that the euro will rise to the highest level on record, Reuters reported citing data from the CFTC.

Updated 51 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Global: Total confirmed cases as of 7 a.m. ET: 20,317,087 — Total deaths: 742,035— Total recoveries: 12,602,544Map.
  2. U.S.: Total confirmed cases as of 7 a.m. ET: 5,141,879 — Total deaths: 164,545 — Total recoveries: 1,714,960 — Total tests: 63,252,257Map.
  3. States: Georgia reports 137 coronavirus deaths, setting new daily record Florida reports another daily record for deaths.
  4. Health care: Trump administration buys 100 million doses of Moderna's coronavirus vaccine.
  5. Business: Moderna reveals it may not hold patent rights for vaccine.
  6. Sports: Big Ten and Pac 12 scrap fall footballMLB salaries at 37%
  7. World: Lebanon reported record new cases as UN warned blast may drive spike — Fauci "seriously" doubts Russia's coronavirus vaccine is safe