Persistent inflation pressures from Middle East energy shocks have kept the ECB in tightening mode through 2026, with the deposit facility rate at 2.50% after September’s 25-basis-point hike and staff projections showing headline inflation averaging 3.0% for the year. Recent Eurozone CPI prints near 3.8% and upward revisions to 2027–2028 forecasts reinforce trader expectations of additional hikes rather than easing, producing the 96% market-implied probability against any 2026 rate cut. Policymakers remain data-dependent amid anchored long-term expectations and limited second-round effects so far, though a rapid de-escalation in energy prices or sharper growth slowdown could still open a narrow window for an unexpected policy reversal before year-end.