The ECB is virtually certain to raise rates. Wall Street is bracing for what comes next.

The European Central Bank is widely expected to raise interest rates at today's meeting, a move that would mark another step in its ongoing effort to bring inflation back toward target. Market participants have largely priced in the decision, so attention is likely to focus less on the hike itself and more on the guidance that accompanies it.

The more consequential debate is where rates ultimately peak. Bond markets are not unified on the terminal rate for this tightening cycle, reflecting genuine uncertainty about how much further the ECB will need to go. That disagreement shows up in pricing across euro-area government bonds, where investors are effectively voting on competing outlooks for growth and inflation.

A key variable is energy. Developments in the Middle East could influence oil and gas prices, feeding through to headline inflation and complicating the ECB's calculus. For observers, the signals to watch are the tone of the policy statement, any revision to staff projections, and how bond yields respond, since these may reveal whether markets expect the tightening cycle to extend or approach its end.