[Institutional Analysis: Middle East Conflict Will Alter U.S. Inflation Path, Federal Reserve Likely to Hold Steady] Jin10 Data, March 11 – Annex Wealth Management Chief Economist Brian Jacobsen stated: February inflation data was originally moving in the right direction, but the emergence of the Middle East conflict has changed this trajectory. Energy, which might have contributed to deflation, will now instead drive inflation. With the fertilizer market in chaos, food prices may also begin to show signs of accelerating inflation. The food and energy components of the CPI account for 20% of the consumption basket, but they play a disproportionately large role in shaping consumer perceptions of inflation. The Federal Reserve is likely to emphasize maintaining interest rates unchanged and staying vigilant on inflation, but monetary policy cannot reopen the Strait of Hormuz, so these tough statements are likely to be merely rhetorical. The Federal Reserve is unlikely to take action. If it does act, it risks repeating the mistake of European Central Bank President Trichet in 2011, when he panicked and raised rates due to rising commodity prices, ultimately exacerbating the Eurozone's economic recession.