Eurozone inflation climbed to 3.2% in May, its highest level since September 2023, propelled by surging energy costs tied to the Middle East conflict. This trajectory has shifted the ECB’s policy stance, with the Governing Council signaling at its late-April meeting that a 25-basis-point hike at the June 11 decision is the base case absent a rapid energy-price reversal. Trader consensus reflected in the 98% implied probability for the increase incorporates fresh inflation data, incoming staff projections, and recent hawkish comments from policymakers emphasizing the need to anchor expectations. A sustained de-escalation in geopolitical tensions that drives energy prices sharply lower could still alter the outcome, though such a development would need to materialize quickly before the meeting.