Analysts: Short-term inflation expectations surge while long-term expectations remain stable

James Reilly, senior macro market economist at Keio Macro, stated in a report that although soaring energy prices have caused investors' inflation expectations to rise rapidly in the short term, long-term inflation expectations have remained stable since the escalation of the Middle East conflict. “The stability of long-term inflation expectations may only reflect the market's view that the Federal Reserve will take necessary measures to keep inflation near its target in the long run,” which implies that the actual policy interest rate will be more restrictive than previously expected.