Geopolitical tensions from the Iran conflict have elevated energy prices and pushed euro-area headline inflation above the ECB’s 2 percent target, with recent readings near 3 percent for 2026. The Governing Council held its deposit facility rate steady at 2 percent in the April 30 meeting but highlighted intensified upside inflation risks and signaled that a June tightening remains a live option. Economists in recent Bloomberg and Reuters surveys now project at least two quarter-point hikes this year, aligning with market pricing of additional tightening before year-end. These developments have driven trader consensus on Polymarket to assign a 92 percent implied probability that the ECB will raise rates at some point in 2026, reflecting the central bank’s data-dependent approach amid persistent energy-price pressures and subdued growth.