The ECB's October 29 decision to hold the deposit rate at 2.5% while signaling a likely December move has anchored trader expectations for a 25-basis-point hike at the December 17 meeting. Recent euro-area inflation data reaching 3.8%, driven by surging energy and food prices amid geopolitical tensions, reinforced upside risks and prompted Governing Council members to describe the policy direction as clear after debating an earlier adjustment. Stable core inflation near 2.5% and absent broad second-round effects have limited support for larger increases or cuts, while rising bond yields and their projected drag on growth favor a measured, one-step tightening followed by a pause. This data-dependent path aligns with the dominant market pricing for a modest December increase.