Recent acceleration in South Korea’s headline CPI to 2.6 percent year-over-year in April—its highest reading since mid-2024—has lifted market-implied odds for 2026 annual inflation into a tight contest among the 2.1–2.3, 2.4–2.6, and 2.7–2.9 percent buckets. Surging petroleum prices amid Middle East tensions drove the April jump, pushing Bank of Korea officials to signal a potential pivot toward rate hikes in the second half even as the base rate remains at 2.50 percent. Traders are weighing whether energy costs will sustain upward pressure through year-end or whether government price caps and softer core readings near 2.2 percent will cap the annual average closer to 2.3–2.5 percent. Key near-term catalysts include the May CPI release and the central bank’s first policy meeting under new Governor Shin on May 28, both of which could shift the narrow probability distribution.