Recent Middle East geopolitical tensions have triggered energy price spikes that pushed euro-area headline and core inflation above the ECB’s 2% target, prompting the Governing Council to hold its deposit facility rate at 2.00% in late April while signaling data-dependent readiness for tightening. Economist surveys and forward curves now assign high odds to at least one 25-basis-point hike in 2026, most likely at the June meeting, amid resilient labor markets and firmer underlying price pressures. This environment underpins the near-certain trader consensus reflected in current pricing. A rapid conflict de-escalation that sharply lowers energy costs or unexpectedly soft inflation and growth readings remain the main factors that could still support an unchanged policy path through year-end.