Middle East Conflict Adds Economic Uncertainty, Inflation Risks

Conflict in Middle East adds uncertainty to global economic outlook and poses risks of higher oil prices and inflation.

Timing and scale of conflict will determine impact, but markets may see immediate fallout.

Adds unpredictable forces as economies were slowing and central banks hoped to contain pandemic-induced inflation.

Poses dilemma for central banks on whether it leads to more inflation or hurts confidence and growth.

If conflict causes oil prices to rise further, it could reverse recent increase in Treasury yields as investors seek safety.