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Debt in smaller emerging market countries, which are now providing the majority of the world's growth, rose to a record high of $69 trillion in the first quarter, IIF reported.

Why it matters: EM debt has been growing at a breakneck pace so far this year, as global investors search for yield with developed market interest rates at or near all-time lows.

  • The lower rates in the U.S., Europe and Japan are pushing increasing demand for higher-yielding EM bonds, with yields on the U.S. benchmark 10-year Treasury note at the lowest since 2016, and many European and Japanese government bonds holding negative yields.
  • Increasingly countries with little to no track record and shaky fundamentals have been able to issue larger bond issues for extremely low rates.

What to watch: Net borrowing in so-called frontier markets — countries too small or underdeveloped to be labeled emerging, such as Zambia, Bangladesh and Tunisia — reached over $250 billion in 2018, bringing the total stock of FM debt to more than $3.2 trillion, according to IIF data. That was equal to 117% of frontier countries' GDP.

The big picture: This could become a problem for both the investors buying the bonds and the countries issuing them. The IMF and IIF both highlighted growing concerns about debt sustainability earlier this year, prompting calls for policy remedies including more transparency in lending to vulnerable countries.

Go deeper: The global debt binge begins anew

Go deeper

National Guard chief says it took 3 hours for Pentagon to grant Jan. 6 request

Photo: Stefani Reynolds/Bloomberg via Getty Images

William Walker, commanding general of the D.C. National Guard, will testify Wednesday that it took three hours and 19 minutes for Pentagon leadership to approve a request for National Guard assistance during the Jan. 6 Capitol attack, according to his prepared remarks.

Why it matters: The timeline over when National Guard requests were made and granted has been a key point of contention in congressional hearings examining the security failures surrounding the Capitol riots.

30 mins ago - World

International Criminal Court opens Israel-Palestine war crimes probe

Israeli Prime Minister Benjamin Netnayahu has strongly objected to the investigation. Photo: Lior Mizrahi/Getty Images

International Criminal Court (ICC) prosecutor Fatou Bensouda on Wednesday announced her intention to open an investigation into crimes allegedly committed in the Palestinian territories since 2014.

Why it matters: The investigation is expected to consider possible war crimes by Israel and Hamas during the 2014 war in Gaza, as well as the construction of West Bank settlements by Israel. It could sharply increase tensions between Israel, which fiercely opposes the probe, and Palestinian leaders, who requested it.

Ben Geman, author of Generate
1 hour ago - Energy & Environment

Exxon says it's well-positioned amid investor pressure

Illustration: Aïda Amer/Axios

ExxonMobil said Wednesday that its oil-and-gas development plans will create good returns even at modest oil prices as the company looks to win back investor confidence after several rocky years.

Driving the news: The company, just ahead of an investor presentation this morning, said its investments are designed to generate returns of over 30% and touted its spending reductions.