Inflation panic has revived under the threat of default, U.S. bonds have plunged, U.S. stocks have turned lower, the Dow has been negative for five consecutive weeks, and the Nasdaq has still risen for three consecutive weeks.
U.S. consumers' long-term inflation expectations unexpectedly rose to a 12-year high in May; Yellen warned that if the debt ceiling is not raised, partial default will be forced. After the announcement of inflation expectations, the three major U.S. stock indexes, which had opened higher, turned lower in early trading; the two-year U.S. bond yield rose, once rising by more than 10 basis points; the U.S. dollar index jumped to a one-month high. The S&P Dow Jones Industrial Average fell for two weeks in a row; regional bank Westpac fell 21% this week; Google hit an eight-month high for three consecutive days and rose 11% this week. Crude oil hit another weekly low, falling for four consecutive weeks. Lun copper rebounded and still fell for four consecutive weeks, while silver fell nearly 7% this week, its largest decline in seven months.
