Persistent energy-driven inflation, fueled by Middle East conflict, underpins the 96% market-implied probability against an ECB rate cut in 2026. The Governing Council raised the deposit facility rate to 2.50% in September and projects headline inflation averaging 3.0% for the year, with core at 2.5%, well above the 2% target through 2027. Hawkish communications and resilient euro-area growth have shifted trader consensus toward further tightening or holds rather than easing, consistent with recent Reuters polls showing December hikes as the base case. Tail risks include faster de-escalation in energy markets or a sharper growth slowdown that could prompt earlier cuts, though current data-dependent guidance makes such outcomes unlikely before year-end.