Report: Long-term inflation expectations remain unaffected by the Middle East crisis.

James Reilly from Capital Economics stated in a report that in response to the soaring energy prices, investors' inflation expectations have surged, but this is only in the short term. Since the escalation of the conflict in the Middle East, long-term inflation expectations have remained stable. The senior market economist said, "However, this stability in long-term expectations may only reflect the view that the Federal Reserve will take all necessary measures to keep long-term inflation rates near target levels." He said, in this scenario, this means maintaining real policy rates at a tighter level than previously expected.