Will the Bank of Israel make no change to the Bank of Israel Interest Rate after the September decision?

Analysis

The Bank of Israel has recently entered an easing cycle, marked by interest rate reductions in two consecutive meetings as of July 2026. While the central bank's forward guidance points toward a continued downward trajectory, this path remains contingent upon the stability of inflation and broader geopolitical conditions. Market analysts and economic observers, including those cited by Reuters and Bankhapoalim, are monitoring these variables to determine if the bank will pause its current easing pace. The decision in September will likely reflect the balance between supporting economic activity and managing the inflationary pressures identified in recent reports from Investing and Tradingeconomics. Consequently, the outlook for the September decision remains sensitive to incoming data regarding the domestic economic environment.

Risks

It is resolution day and a NO bet lost (or a YES bet lost): if we had traded NO at 75%, the BOI most likely paused as its own staff forecast (rate averaging 3.0% only by Q2 2027, implying just ~2 cuts over 6-7 remaining meetings) implied, and the market's 75% hold price was right; if we had traded YES, a soft July CPI print (~Aug 15) plus Governor Yaron's explicitly dovish guidance produced a third consecutive cut to 3.25%.