**Elevated euro area inflation near 3.8% in September, driven primarily by energy price surges from the ongoing Middle East conflict, has positioned a final 25 basis point ECB deposit rate increase to 2.75% as the dominant trader outcome for December 2026.** The bank already delivered equivalent hikes in June and September to address inflation running well above its 2% target, with officials favoring a data-dependent, quarterly pace that points to a December move coinciding with updated staff projections. Limited evidence of second-round effects on wages or core prices, alongside resilient growth tempered by tighter financial conditions from rising bond yields, supports expectations of a measured response rather than accelerated or deeper tightening. This aligns closely with economist surveys anticipating a pause at the late-October meeting followed by the year-end adjustment, while markets price additional moves beyond that point.