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At first glance, the European Union doesn't seem like the most creditworthy of borrowers. But the Wall Street Journal highlights the massive investor demand for European sovereign bonds, a demand that is enabling countries like Austria to issue bonds at 1% for 70 years.

The Journal looks at countries like Spain, France, and Italy that face outsized political and economic risks in the coming years. These economies are facing slowing or even negative population growth, historically high debt burdens, widening economic inequality, and the rise of populist parties with unorthodox economic philosophies. None of these trends should inspire the confidence of lenders, yet the search for yield has inspired investors to front the money nonetheless.

Why it matters: That bond investors are unafraid of a slow-growing, highly-indebted, and perennially-gridlocked country like Italy defaulting on debt over the next thirty or more years tells us that:

  • Central bank stimulus has helped make government borrowing cheaper;
  • The market thinks that countries have a much higher capacity for debt than politicians do;
  • Significantly higher inflation isn't on the way;
  • The U.S. should seriously consider issuing debt at maturities longer than 30 years. Locking in today's interest rates for 70 or more years would be a godsend to future budgeters.

Go deeper

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

First glimpse of the Biden market

Photo: Jonathan Ernst-Pool/Getty Images

Investors made clear what companies they think will be winners and which will be losers in President Joe Biden's economy on Wednesday, selling out of gun makers, pot purveyors, private prison operators and payday lenders, and buying up gambling, gaming, beer stocks and Big Tech.

What happened: Private prison operator CoreCivic and private prison REIT Geo fell by 7.8% and 4.1%, respectively, while marijuana ETF MJ dropped 2% and payday lenders World Acceptance and EZCorp each fell by more than 1%.

Mike Allen, author of AM
57 mins ago - Politics & Policy

Biden-Harris, Day 1: What mattered most

President Joe Biden and first lady Dr. Jill Biden arrive at the North Portico of the White House. Photo: Alex Brandon-Pool/Getty Images

The Axios experts help you sort significance from symbolism. Here are the six Day 1 actions by President Biden that matter most.

Driving the news: Today, on his first full day, Biden translates his promise of a stronger federal response to the pandemic into action — starting with 10 executive orders and other directives, Caitlin Owens writes.

2 hours ago - Politics & Policy

Read: Pete Buttigieg's opening statement ahead of confirmation hearing

Pete Buttigieg, President Biden's nominee to be secretary of transportation, in December. Photo: Kevin Lamarque/AFP via Getty Images

Pete Buttigieg, President Biden's nominee to lead the Transportation Department, will tell senators he plans to prioritize the health and safety of public transportation systems during the pandemic — and look to infrastructure projects to rebuild the economy — according to a copy of his prepared remarks obtained by Axios.

Driving the news: Buttigieg will testify at 10 a.m. ET before the Senate Committee on Commerce, Science and Transportation. He is expected to face a relatively smooth confirmation process, though GOP lawmakers may press him on "green" elements of Biden's transportation proposals.

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